# 62009TJ0139

JUDGMENT OF THE GENERAL COURT (Sixth Chamber)

27 September 2012 (
  *1
  )

*1

‛State aid — Fruit and vegetable sector — ‘Contingency plans’ seeking to support the fruit and vegetable market in France — Decision declaring the aid incompatible with the common market — Concept of State aid — State resources — Co-financing by a public institution and by voluntary contributions from farmers’ organisations — Arguments not raised during the administrative procedure — Duty to state the reasons on which the decision is based’

In Case T-139/09,

French Republic, represented initially by E. Belliard, G. de Bergues and A.-L. During, and subsequently by E. Belliard, G. de Bergues and J. Gstalter, acting as Agents,

French Republic,

applicant,

v

European Commission, represented by B. Stromsky, acting as Agent,

European Commission,

defendant,

ACTION for annulment of Commission Decision C(2009) 203 final of 28 January 2009 on the ‘contingency plans’ in the fruit and vegetable sector implemented by the French Republic,

THE GENERAL COURT (Sixth Chamber),

composed of H. Kanninen, President, N. Wahl and S. Soldevila Fragoso (Rapporteur), Judges,

Registrar: C. Kristensen, Administrator,

having regard to the written procedure and further to the hearing on 23 April 2012,

gives the following

Judgment

Judgment

Legal context

Legal context

European Union law

European Union law

| 1 | Under Article 87(1) EC:
  ‘Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.’ |
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1

Under Article 87(1) EC:

‘Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.’

Applicable national legislation

Applicable national legislation

Office national interprofessionnel des fruits, des légumes et de l’horticulture (National Interbranch Office for Fruit, Vegetables and Horticulture)

| 2 | Article L.621-1 of the French Rural Code, in the version in force on 1 January 2002 (‘the Rural Code’), provides that, ‘[i]n order to achieve the objectives defined by the Treaty instituting the European Community and to contribute to guaranteeing and improving income, reducing inequality, the optimum use of the production factors and regularising the markets in the interests of farmers, processors, traders, businessmen and consumers, intervention agencies by product or group of products may be created in the agricultural and food sectors by decree of the Conseil d’État.’ |
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2

Article L.621-1 of the French Rural Code, in the version in force on 1 January 2002 (‘the Rural Code’), provides that, ‘[i]n order to achieve the objectives defined by the Treaty instituting the European Community and to contribute to guaranteeing and improving income, reducing inequality, the optimum use of the production factors and regularising the markets in the interests of farmers, processors, traders, businessmen and consumers, intervention agencies by product or group of products may be created in the agricultural and food sectors by decree of the Conseil d’État.’

| 3 | Article L.621-2 of the Rural Code states:
  ‘Those agencies shall be public institutions of an industrial and commercial nature under the supervision of the State and shall exercise their powers over all the agricultural and food sectors corresponding to the products for which they are responsible. They may be given administrative tasks connected with the exercise of their duties. The staff of those agencies is governed by common staff regulations under public law defined by decree.’ |
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3

Article L.621-2 of the Rural Code states:

‘Those agencies shall be public institutions of an industrial and commercial nature under the supervision of the State and shall exercise their powers over all the agricultural and food sectors corresponding to the products for which they are responsible. They may be given administrative tasks connected with the exercise of their duties. The staff of those agencies is governed by common staff regulations under public law defined by decree.’

Economic Agricultural Committees

– Tasks and accreditation

| 4 | Article L.551-1 of the Rural Code provides that, ‘[i]n a given region, agricultural co-operative societies and their unions, agricultural cooperatives, agricultural unions other than general unions governed by the provisions of Book IV of the Employment Code, associations of agricultural farmers governed by the provisions of the Law of 1 July 1901, when their purpose is the long-term control of the valuation of their products, strengthening the commercial organisation of farmers, organising and maintaining production in a particular area, may be recognised by the administrative authority as farmers’ organisations’. |
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4

Article L.551-1 of the Rural Code provides that, ‘[i]n a given region, agricultural co-operative societies and their unions, agricultural cooperatives, agricultural unions other than general unions governed by the provisions of Book IV of the Employment Code, associations of agricultural farmers governed by the provisions of the Law of 1 July 1901, when their purpose is the long-term control of the valuation of their products, strengthening the commercial organisation of farmers, organising and maintaining production in a particular area, may be recognised by the administrative authority as farmers’ organisations’.

| 5 | Under Article L.552-1 of the Rural Code:
  ‘In order to harmonise the production, distribution, prices and application of the common rules for placing products on the market, the recognised organisations listed in the preceding article and the general or specialised agricultural unions may group together to form, in a particular area and for the same sector of products as defined in point 2 of Article L.551-1, an economic agricultural committee.
  The economic agricultural committees must be either agricultural unions governed by Book IV of the Employment Code or associations governed by the Law of 1 July 1901 ...
  The economic agricultural committees shall lay down common rules for their members.
  The economic agricultural committees shall contribute to the implementation of national and Community economic policies and may be consulted on the orientation of policy in their sector.’ |
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5

Under Article L.552-1 of the Rural Code:

‘In order to harmonise the production, distribution, prices and application of the common rules for placing products on the market, the recognised organisations listed in the preceding article and the general or specialised agricultural unions may group together to form, in a particular area and for the same sector of products as defined in point 2 of Article L.551-1, an economic agricultural committee.

The economic agricultural committees must be either agricultural unions governed by Book IV of the Employment Code or associations governed by the Law of 1 July 1901 ...

The economic agricultural committees shall lay down common rules for their members.

The economic agricultural committees shall contribute to the implementation of national and Community economic policies and may be consulted on the orientation of policy in their sector.’

| 6 | Article L.552-2 of that Code states:
  ‘The particular priorities and advantages from which recognised farmers’ groups benefit may be granted to economic agricultural committees once they are approved by the administrative authority.
  Approval shall be granted, suspended or withdrawn by the administrative authority, on opinion of the Conseil supérieur d’orientation de l’économie agricole et alimentaire (Higher Council for orientation of the agricultural and food economy) provided for in Article 14 I of the amended Law of 8 August 1962 supplementing the Law on agricultural orientation.’ |
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6

Article L.552-2 of that Code states:

‘The particular priorities and advantages from which recognised farmers’ groups benefit may be granted to economic agricultural committees once they are approved by the administrative authority.

Approval shall be granted, suspended or withdrawn by the administrative authority, on opinion of the Conseil supérieur d’orientation de l’économie agricole et alimentaire (Higher Council for orientation of the agricultural and food economy) provided for in Article 14 I of the amended Law of 8 August 1962 supplementing the Law on agricultural orientation.’

| 7 | The first subparagraph of Article L.554-1 of the Rural Code states that ‘[t]hose economic agricultural committees having sufficient experience in certain areas may ask the competent administrative authority that the rules accepted by their members laid down in Article 15b(1) of Regulation (EEC) No 1035/72 of the Council of 18 May 1972 on the common organisation of the market in fruit and vegetables be made compulsory for farmers established in one or more economic areas within their region’. |
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7

The first subparagraph of Article L.554-1 of the Rural Code states that ‘[t]hose economic agricultural committees having sufficient experience in certain areas may ask the competent administrative authority that the rules accepted by their members laid down in Article 15b(1) of Regulation (EEC) No 1035/72 of the Council of 18 May 1972 on the common organisation of the market in fruit and vegetables be made compulsory for farmers established in one or more economic areas within their region’.

| 8 | Article R*552-1 of the Rural Code states that ‘[t]he application for approval made, in respect of a particular region or sector of products, by an economic agricultural committee shall be sent to the Minister for Agriculture by the Préfet of the département of the seat of the committee’ and Article R*552-2 provides that the application must be accompanied by certain documents, including ‘the committee’s bye-laws’, which must include clauses providing that ‘[t]he rules issued by the committee shall not be applicable until they have been approved by the Minister for Agriculture’, a ‘[d]eclaration stating the nature and forms of aid likely to be granted, if applicable, to the committee members’ and the ‘[t]exts of the rules issued by the committee in accordance with the provisions of Article L.552-1’. Article R.552-4 of the Rural Code states, finally, that ‘[f]ollowing an opinion from the Conseil supérieur d’orientation et de coordination de l’économie agricole et alimentaire, the Minister for Agriculture, by application of Article L.552-2, shall rule on the application for approval’. |
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8

Article R*552-1 of the Rural Code states that ‘[t]he application for approval made, in respect of a particular region or sector of products, by an economic agricultural committee shall be sent to the Minister for Agriculture by the Préfet of the département of the seat of the committee’ and Article R*552-2 provides that the application must be accompanied by certain documents, including ‘the committee’s bye-laws’, which must include clauses providing that ‘[t]he rules issued by the committee shall not be applicable until they have been approved by the Minister for Agriculture’, a ‘[d]eclaration stating the nature and forms of aid likely to be granted, if applicable, to the committee members’ and the ‘[t]exts of the rules issued by the committee in accordance with the provisions of Article L.552-1’. Article R.552-4 of the Rural Code states, finally, that ‘[f]ollowing an opinion from the Conseil supérieur d’orientation et de coordination de l’économie agricole et alimentaire, the Minister for Agriculture, by application of Article L.552-2, shall rule on the application for approval’.

– Operation

| 9 | Under subparagraph 1 of Article R.552-10 of the Rural Code, ‘[a]n approved economic agricultural committee shall not issue new rules or amend rules already approved without the express agreement of the Minister for Agriculture, following an opinion from the Conseil supérieur d’orientation et de coordination de l’économie agricole et alimentaire’. |
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9

Under subparagraph 1 of Article R.552-10 of the Rural Code, ‘[a]n approved economic agricultural committee shall not issue new rules or amend rules already approved without the express agreement of the Minister for Agriculture, following an opinion from the Conseil supérieur d’orientation et de coordination de l’économie agricole et alimentaire’.

| 10 | Article R.552-11 of the Rural Code further provides that ‘[t]he Minister for Agriculture shall designate a representative to each approved economic agricultural committee’ and that that ‘representative, who shall have the role of technical adviser to the committee, shall attend or may be represented at the meetings of the Board and the general meeting on the conditions laid down by the Minister for Agriculture’, that he ‘may consult on site or have sent to him all documents concerning the activity of the committee or the bodies which are members thereof’ and that he ‘shall regularly be kept informed of all decisions taken by the Board and the resolutions adopted at the general meeting’. |
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10

Article R.552-11 of the Rural Code further provides that ‘[t]he Minister for Agriculture shall designate a representative to each approved economic agricultural committee’ and that that ‘representative, who shall have the role of technical adviser to the committee, shall attend or may be represented at the meetings of the Board and the general meeting on the conditions laid down by the Minister for Agriculture’, that he ‘may consult on site or have sent to him all documents concerning the activity of the committee or the bodies which are members thereof’ and that he ‘shall regularly be kept informed of all decisions taken by the Board and the resolutions adopted at the general meeting’.

| 11 | Finally, under Article R.552-14 of the Rural Code:
  ‘The Minister for Agriculture may, at any stage, after having obtained the observations of the committee and the opinion of the Conseil supérieur d’orientation et de coordination de l’économie agricole et alimentaire, withdraw his approval of rules in force which had previously been approved. He shall fix the date on which withdrawal of the approval becomes effective. If, none the less, the committee decides to maintain those rules, it shall lose the status of approved committee ...’ |
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11

Finally, under Article R.552-14 of the Rural Code:

‘The Minister for Agriculture may, at any stage, after having obtained the observations of the committee and the opinion of the Conseil supérieur d’orientation et de coordination de l’économie agricole et alimentaire, withdraw his approval of rules in force which had previously been approved. He shall fix the date on which withdrawal of the approval becomes effective. If, none the less, the committee decides to maintain those rules, it shall lose the status of approved committee ...’

– Registration fees and contributions

| 12 | Under Article L.553-1 of the Rural Code, ‘[t]he bodies recognised or approved pursuant to Articles L.551-1 and L.552-2 may be authorised by decree, following an opinion of the Conseil d’État, to receive registration fees and contributions assessed on the basis of the value of products, the land area or those two factors combined’. |
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12

Under Article L.553-1 of the Rural Code, ‘[t]he bodies recognised or approved pursuant to Articles L.551-1 and L.552-2 may be authorised by decree, following an opinion of the Conseil d’État, to receive registration fees and contributions assessed on the basis of the value of products, the land area or those two factors combined’.

| 13 | Article R*553-2 of the Rural Code, concerning recognised farmers’ groups, provides that they ‘shall be entitled to receive from each of their members a registration fee the amount of which shall be fixed on a uniform basis per farmer and contributions assessed on the value of the production sold on the basis of which they were recognised’ and that ‘the amount of the registration fees and rate of contributions shall not exceed the maxima established by decision of the Minister for Agriculture, following an opinion of the Conseil supérieur d’orientation et de coordination de l’économie agricole et alimentaire’. |
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13

Article R*553-2 of the Rural Code, concerning recognised farmers’ groups, provides that they ‘shall be entitled to receive from each of their members a registration fee the amount of which shall be fixed on a uniform basis per farmer and contributions assessed on the value of the production sold on the basis of which they were recognised’ and that ‘the amount of the registration fees and rate of contributions shall not exceed the maxima established by decision of the Minister for Agriculture, following an opinion of the Conseil supérieur d’orientation et de coordination de l’économie agricole et alimentaire’.

| 14 | Article R*553-5 of the Rural Code, concerning registration fees and contributions from recognised farmers’ groups, provides that the ‘amount of the registration fees and rate of contributions and the methods of their payment shall be established in an ordinary general meeting’. |
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14

Article R*553-5 of the Rural Code, concerning registration fees and contributions from recognised farmers’ groups, provides that the ‘amount of the registration fees and rate of contributions and the methods of their payment shall be established in an ordinary general meeting’.

| 15 | Article R*553-6 of the Rural Code states similarly that the ‘approved economic committees are authorised to receive, from each of their members, an enrolment fee and, as a subscription, from their members which are recognised agricultural groups, a fraction of the contributions received by the groups themselves’ and that ‘the Minister for Agriculture may, after obtaining the opinion of the Conseil supérieur d’orientation et de coordination de l’économie agricole et alimentaire, set the maximum amount for contributions received by a committee’. |
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15

Article R*553-6 of the Rural Code states similarly that the ‘approved economic committees are authorised to receive, from each of their members, an enrolment fee and, as a subscription, from their members which are recognised agricultural groups, a fraction of the contributions received by the groups themselves’ and that ‘the Minister for Agriculture may, after obtaining the opinion of the Conseil supérieur d’orientation et de coordination de l’économie agricole et alimentaire, set the maximum amount for contributions received by a committee’.

| 16 | Subparagraph 1 of Article R*553-7 of the Rural Code states that, ‘[w]hen an approved economic agricultural committee, by application of Article L.552-2, has obtained an extension of one or more rules drafted for the farmers and groups under its aegis to all of the farmers in its area, farmers for which that rule has become obligatory because of that extension must pay all or part of the contributions fixed under Article R.553-2 to the committee on the conditions laid down by decree of the Minister for Agriculture’. |
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16

Subparagraph 1 of Article R*553-7 of the Rural Code states that, ‘[w]hen an approved economic agricultural committee, by application of Article L.552-2, has obtained an extension of one or more rules drafted for the farmers and groups under its aegis to all of the farmers in its area, farmers for which that rule has become obligatory because of that extension must pay all or part of the contributions fixed under Article R.553-2 to the committee on the conditions laid down by decree of the Minister for Agriculture’.

– Audit by the administrative authority

| 17 | Article R*553-10 of the Rural Code provides:
  ‘Audits by the Minister for Agriculture of the approved economic committees and the recognised farmers’ groups shall cover in particular:
  
  
  
  
  
  — | the accounts and the regularity of the operations of those bodies; |
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17

Article R*553-10 of the Rural Code provides:

‘Audits by the Minister for Agriculture of the approved economic committees and the recognised farmers’ groups shall cover in particular:

—

the accounts and the regularity of the operations of those bodies;

| — | the use of the aid received, in particular any aid granted by the State, public bodies, public institutions and semi-public undertakings; |
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—

the use of the aid received, in particular any aid granted by the State, public bodies, public institutions and semi-public undertakings;

| — | the application by farmers’ groups, economic agricultural committees and the bodies and farmers which form them of the rules laid down under Articles L.551-1 and L.551-2 and the application of the Laws and rules in force, in particular Laws and rules concerning fraud prevention and harmonisation.’ |
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—

the application by farmers’ groups, economic agricultural committees and the bodies and farmers which form them of the rules laid down under Articles L.551-1 and L.551-2 and the application of the Laws and rules in force, in particular Laws and rules concerning fraud prevention and harmonisation.’

| 18 | In that regard, Article R*553-13 of the Rural Code provides that ‘[t]he officials of the Ministry of Agriculture, authorised for that purpose by the Minister for Agriculture, shall have access [to] the services of the recognised farmers’ groups and approved economic agricultural committees’ and that they ‘may see all documents, letters and accounting or administrative documents’. Similarly, under Article R*553-14, ‘[t]he officials and agents of the Ministry of Agriculture, particularly those of the fraud prevention and quality control service, shall, concurrently with agents of the bodies concerned, monitor the application by those bodies and by farmers of the rules in force laid down by the groups and economic agricultural committees’. |
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18

In that regard, Article R*553-13 of the Rural Code provides that ‘[t]he officials of the Ministry of Agriculture, authorised for that purpose by the Minister for Agriculture, shall have access [to] the services of the recognised farmers’ groups and approved economic agricultural committees’ and that they ‘may see all documents, letters and accounting or administrative documents’. Similarly, under Article R*553-14, ‘[t]he officials and agents of the Ministry of Agriculture, particularly those of the fraud prevention and quality control service, shall, concurrently with agents of the bodies concerned, monitor the application by those bodies and by farmers of the rules in force laid down by the groups and economic agricultural committees’.

| 19 | Finally, Article R*553-16 of the Rural Code states that ‘[t]he audit to be made of the application [of Article] R.553-7 concerning the enrolment fees and contributions shall be carried out in the circumstances laid down in Article R.553-14’. |
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19

Finally, Article R*553-16 of the Rural Code states that ‘[t]he audit to be made of the application [of Article] R.553-7 concerning the enrolment fees and contributions shall be carried out in the circumstances laid down in Article R.553-14’.

Background to the dispute

Background to the dispute

| 20 | The Office national interprofessionnel des fruits, des légumes et de l’horticulture (Oniflhor), a public industrial and commercial institution under the supervision of the French State, has the task, inter alia, of strengthening the economic efficiency of the fruit and vegetable sector. |
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20

The Office national interprofessionnel des fruits, des légumes et de l’horticulture (Oniflhor), a public industrial and commercial institution under the supervision of the French State, has the task, inter alia, of strengthening the economic efficiency of the fruit and vegetable sector.

| 21 | The economic agricultural committees consist, at the regional level, of farmers’ organisations, known as ‘farmers’ groups’ until 1999, in a particular sector and seek to establish common rules for their members in order to harmonise production, marketing, pricing and placing on the market of the products. |
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21

The economic agricultural committees consist, at the regional level, of farmers’ organisations, known as ‘farmers’ groups’ until 1999, in a particular sector and seek to establish common rules for their members in order to harmonise production, marketing, pricing and placing on the market of the products.

| 22 | Following a complaint, on 31 July 2002 the Commission of the European Communities sent the French Republic a request for information on non-notified aid in the fruit and vegetable sector, paid under contingency plans to farmers’ organisations from an operational fund managed by the approved economic agricultural committees financed by Oniflhor and by contributions of farmers’ organisations (‘sectoral contributions’). The purpose of those contingency plans was to attenuate the effects of temporary excesses in the supply of fruit and vegetables, to regulate the market price by a coordinated collective approach and to finance structural measures intended to enable the adaptation of sectors to the market. |
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22

Following a complaint, on 31 July 2002 the Commission of the European Communities sent the French Republic a request for information on non-notified aid in the fruit and vegetable sector, paid under contingency plans to farmers’ organisations from an operational fund managed by the approved economic agricultural committees financed by Oniflhor and by contributions of farmers’ organisations (‘sectoral contributions’). The purpose of those contingency plans was to attenuate the effects of temporary excesses in the supply of fruit and vegetables, to regulate the market price by a coordinated collective approach and to finance structural measures intended to enable the adaptation of sectors to the market.

| 23 | A meeting was held on 21 October 2002 between the Commission and the French authorities, following which the latter provided, on 26 December 2002, information confirming that such aid had been granted from 1992 until 2002. The Commission requested a full inventory of that aid on 16 April 2003. The French authorities replied to that request on 22 July 2003. |
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23

A meeting was held on 21 October 2002 between the Commission and the French authorities, following which the latter provided, on 26 December 2002, information confirming that such aid had been granted from 1992 until 2002. The Commission requested a full inventory of that aid on 16 April 2003. The French authorities replied to that request on 22 July 2003.

| 24 | By letter of 20 July 2005, the Commission informed the French Republic of its decision to open the formal investigation procedure laid down in Article 88(2) EC (‘the decision to open the investigation’). |
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24

By letter of 20 July 2005, the Commission informed the French Republic of its decision to open the formal investigation procedure laid down in Article 88(2) EC (‘the decision to open the investigation’).

| 25 | The decision to open the investigation was published in the Official Journal of the European Union of 22 September 2005 (OJ 2005 C 233, p. 21). The Commission requested interested parties to submit their observations on the measures at issue carried out as part of the contingency plans (‘the disputed measures’). |
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25

The decision to open the investigation was published in the Official Journal of the European Union of 22 September 2005 (OJ 2005 C 233, p. 21). The Commission requested interested parties to submit their observations on the measures at issue carried out as part of the contingency plans (‘the disputed measures’).

Official Journal of the European Union

| 26 | The Commission received the observations of the French authorities by letter of 4 October 2005. |
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26

The Commission received the observations of the French authorities by letter of 4 October 2005.

| 27 | In addition, it received a letter of 20 October 2005 from the Fédération de l’organisation économique fruits et légumes (Federation of Economic Organisation for the fruit and vegetable sectors) (Fedecom), an interested third party, describing in particular the composition, financing methods and role of the approved agricultural economic committees in the award of the aid at issue, which was sent to the French authorities on 1 December 2005. The French authorities did not dispute that information in their letter of 28 December 2005, by which they also authorised the sending of their letters of 26 December 2002 and 22 July 2003 to Fedecom and made a correction concerning the amount of the aid paid in 2002. |
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27

In addition, it received a letter of 20 October 2005 from the Fédération de l’organisation économique fruits et légumes (Federation of Economic Organisation for the fruit and vegetable sectors) (Fedecom), an interested third party, describing in particular the composition, financing methods and role of the approved agricultural economic committees in the award of the aid at issue, which was sent to the French authorities on 1 December 2005. The French authorities did not dispute that information in their letter of 28 December 2005, by which they also authorised the sending of their letters of 26 December 2002 and 22 July 2003 to Fedecom and made a correction concerning the amount of the aid paid in 2002.

| 28 | After that formal investigation procedure, the Commission adopted Decision C(2009) 203 final of 28 January 2009 on the ‘contingency plans’ in the fruit and vegetable sector implemented by France (OJ 2009 L 127, p. 11; ‘the contested decision’). |
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28

After that formal investigation procedure, the Commission adopted Decision C(2009) 203 final of 28 January 2009 on the ‘contingency plans’ in the fruit and vegetable sector implemented by France (OJ 2009 L 127, p. 11; ‘the contested decision’).

| 29 | In the contested decision, the Commission held that the aid allocated under the contingency plans, paid to farmers’ organisations, constituted State aid and that that aid was unlawful and incompatible with the common market. It therefore ordered that the aid be recovered by the French Republic, with interest, from its beneficiaries. |
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29

In the contested decision, the Commission held that the aid allocated under the contingency plans, paid to farmers’ organisations, constituted State aid and that that aid was unlawful and incompatible with the common market. It therefore ordered that the aid be recovered by the French Republic, with interest, from its beneficiaries.

Procedure and forms of order sought by the parties

Procedure and forms of order sought by the parties

| 30 | By application lodged at the Registry of the Court of First Instance on 8 April 2009, the French Republic brought the present action. |
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30

By application lodged at the Registry of the Court of First Instance on 8 April 2009, the French Republic brought the present action.

| 31 | On hearing the report of the Judge-Rapporteur, the Court of First Instance (Sixth Chamber) decided to open the oral procedure. |
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31

On hearing the report of the Judge-Rapporteur, the Court of First Instance (Sixth Chamber) decided to open the oral procedure.

| 32 | At the hearing, on 23 April 2012, the parties presented oral argument and answered the oral questions put by the Court. |
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32

At the hearing, on 23 April 2012, the parties presented oral argument and answered the oral questions put by the Court.

| 33 | The French Republic claims that the Court should:
  
  
  
  
  
  — | annul the contested decision in so far as it refers to the part of the disputed measures which was financed by sectoral contributions; |
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33

The French Republic claims that the Court should:

—

annul the contested decision in so far as it refers to the part of the disputed measures which was financed by sectoral contributions;

| — | in the alternative, annul the contested decision in its entirety; |
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—

in the alternative, annul the contested decision in its entirety;

| — | order the Commission to pay the costs. |
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—

order the Commission to pay the costs.

| 34 | The Commission contends that the Court should:
  
  
  
  
  
  — | dismiss the application of the French Republic; |
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34

The Commission contends that the Court should:

—

dismiss the application of the French Republic;

| — | order the French Republic to pay the costs. |
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—

order the French Republic to pay the costs.

Law

Law

| 35 | In support of its action, the French Republic puts forward two pleas in law seeking annulment alleging, firstly, infringement of the duty to state reasons and, secondly, an error of law in that the Commission has categorised as State aid within the meaning of Article 87(1) EC measures financed by voluntary contributions from the sector in question. |
| --- | --- |

35

In support of its action, the French Republic puts forward two pleas in law seeking annulment alleging, firstly, infringement of the duty to state reasons and, secondly, an error of law in that the Commission has categorised as State aid within the meaning of Article 87(1) EC measures financed by voluntary contributions from the sector in question.

The first plea in law, alleging infringement of the duty to state reasons

The first plea in law, alleging infringement of the duty to state reasons

| 36 | The French Republic submits that the contested decision is vitiated by a lack of reasoning inasmuch as it refers to the disputed measures financed by sectoral contributions, since the onus was on the Commission to develop its arguments in a clear manner when, as is the case here, it is departing from a well-established line of decisions. In particular, the Commission did not justify the extension of the categorisation of State aid to measures financed by voluntary contributions. |
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36

The French Republic submits that the contested decision is vitiated by a lack of reasoning inasmuch as it refers to the disputed measures financed by sectoral contributions, since the onus was on the Commission to develop its arguments in a clear manner when, as is the case here, it is departing from a well-established line of decisions. In particular, the Commission did not justify the extension of the categorisation of State aid to measures financed by voluntary contributions.

| 37 | In accordance with consistent case-law, the scope of the duty to state reasons depends on the nature of the act in question and the context in which it was adopted. The statement of reasons must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the European Union judicature to review the legality of the measure and the persons concerned to ascertain the reasons for the measure, so that they can defend their rights and ascertain whether or not the decision is well founded. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (Case C-367/95 P Commission v Sytraval and Brink’s France [1998] ECR I-1719, paragraph 63, and judgment of 30 November 2011 in Case T-238/09 Sniace v Commission, not published in the ECR, paragraph 37). |
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37

In accordance with consistent case-law, the scope of the duty to state reasons depends on the nature of the act in question and the context in which it was adopted. The statement of reasons must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the European Union judicature to review the legality of the measure and the persons concerned to ascertain the reasons for the measure, so that they can defend their rights and ascertain whether or not the decision is well founded. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (Case C-367/95 P Commission v Sytraval and Brink’s France [1998] ECR I-1719, paragraph 63, and judgment of 30 November 2011 in Case T-238/09 Sniace v Commission, not published in the ECR, paragraph 37).

Commission

Sytraval and Brink’s France

Sniace

Commission

| 38 | In particular, the Commission is not obliged to adopt a position on all the arguments relied on by the parties concerned. It is sufficient if it sets out the facts and the legal considerations having decisive importance in the context of the decision (Joined Cases C-341/06 P and C-342/06 P Chronopost and La Poste v UFEX and Others [2008] ECR I-4777, paragraph 96, and Joined Cases T-102/07 and T-120/07 Freistaat Sachsen and Others v Commission [2010] ECR II-585, paragraph 180). |
| --- | --- |

38

In particular, the Commission is not obliged to adopt a position on all the arguments relied on by the parties concerned. It is sufficient if it sets out the facts and the legal considerations having decisive importance in the context of the decision (Joined Cases C-341/06 P and C-342/06 P Chronopost and La Poste v UFEX and Others [2008] ECR I-4777, paragraph 96, and Joined Cases T-102/07 and T-120/07 Freistaat Sachsen and Others v Commission [2010] ECR II-585, paragraph 180).

Chronopost and La Poste

UFEX and Others

Freistaat Sachsen and Others

Commission

| 39 | Finally, it is also apparent from the case-law that, although a decision of the Commission which fits into a well-established line of decisions may be reasoned in a summary manner, for example by a reference to those decisions, if it goes appreciably further than the previous decisions, the Commission must give an account of its reasoning (Case 73/74 Groupement des fabricants de papiers peints de Belgique and Others v Commission [1975] ECR 1491, paragraph 31; Case C-295/07 P Commission v Département du Loiret [2008] ECR I-9363, paragraph 44; and Case C-521/09 P Elf Aquitaine v Commission [2011] ECR I-8947, paragraph 155). |
| --- | --- |

39

Finally, it is also apparent from the case-law that, although a decision of the Commission which fits into a well-established line of decisions may be reasoned in a summary manner, for example by a reference to those decisions, if it goes appreciably further than the previous decisions, the Commission must give an account of its reasoning (Case 73/74 Groupement des fabricants de papiers peints de Belgique and Others v Commission [1975] ECR 1491, paragraph 31; Case C-295/07 P Commission v Département du Loiret [2008] ECR I-9363, paragraph 44; and Case C-521/09 P Elf Aquitaine v Commission [2011] ECR I-8947, paragraph 155).

Groupement des fabricants de papiers peints de Belgique and Others

Commission

Commission

Département du Loiret

Elf Aquitaine

Commission

| 40 | It is in the light of those principles that the plea relating to insufficient reasoning of the contested decision must be examined. |
| --- | --- |

40

It is in the light of those principles that the plea relating to insufficient reasoning of the contested decision must be examined.

| 41 | In the present case, it is apparent from the contested decision that the Commission was led to examine, for the first time, whether measures financed by both State contributions and voluntary contributions from professionals in a sector could constitute State aid within the meaning of Article 87(1) EC. Accordingly, the onus was on the Commission to give a detailed reply to the arguments raised by the French Republic during the administrative proceeding concerning the categorisation of the sectoral contributions as State resources. |
| --- | --- |

41

In the present case, it is apparent from the contested decision that the Commission was led to examine, for the first time, whether measures financed by both State contributions and voluntary contributions from professionals in a sector could constitute State aid within the meaning of Article 87(1) EC. Accordingly, the onus was on the Commission to give a detailed reply to the arguments raised by the French Republic during the administrative proceeding concerning the categorisation of the sectoral contributions as State resources.

| 42 | In recitals 24 to 28 in the preamble to the contested decision, the Commission first examined in detail the financing mechanism of the disputed measures. Thus, it found that they were financed from an operational fund managed by the approved economic agricultural committees. This fund was financed on the basis of the same principles as those governing Community aid provided for by Article 15 of Council Regulation (EC) No 2200/96 of 28 October 1996 on the common organisation of the market in fruit and vegetables (OJ 1996 L 297, p. 1), namely by public aid and financial contributions from farmers, based on the quantities or value of the fruit and vegetables sold, which contributions represent between 30% and 50% of the total sums in that fund. The contributions paid by the farmers’ organisations were, however, only voluntary and had not been made obligatory by the administrative authority. Non-payment of those contributions had the effect of depriving the farmers’ organisations concerned of public funds. |
| --- | --- |

42

In recitals 24 to 28 in the preamble to the contested decision, the Commission first examined in detail the financing mechanism of the disputed measures. Thus, it found that they were financed from an operational fund managed by the approved economic agricultural committees. This fund was financed on the basis of the same principles as those governing Community aid provided for by Article 15 of Council Regulation (EC) No 2200/96 of 28 October 1996 on the common organisation of the market in fruit and vegetables (OJ 1996 L 297, p. 1), namely by public aid and financial contributions from farmers, based on the quantities or value of the fruit and vegetables sold, which contributions represent between 30% and 50% of the total sums in that fund. The contributions paid by the farmers’ organisations were, however, only voluntary and had not been made obligatory by the administrative authority. Non-payment of those contributions had the effect of depriving the farmers’ organisations concerned of public funds.

| 43 | Furthermore, it is apparent from recital 40 in the preamble to the contested decision that, in its letter of 4 October 2005 submitting its observations on the decision to open the formal investigation procedure, the French Republic indicated that the contributions paid by professionals and intended to finance the contingency plans could not be equated to State resources, since they were paid on a voluntary basis, they were not extended obligatorily by the public authorities to all the farmers’ organisations concerned and were freely available to the economic agricultural committees. |
| --- | --- |

43

Furthermore, it is apparent from recital 40 in the preamble to the contested decision that, in its letter of 4 October 2005 submitting its observations on the decision to open the formal investigation procedure, the French Republic indicated that the contributions paid by professionals and intended to finance the contingency plans could not be equated to State resources, since they were paid on a voluntary basis, they were not extended obligatorily by the public authorities to all the farmers’ organisations concerned and were freely available to the economic agricultural committees.

| 44 | In recitals 43 to 62 in the preamble to the contested decision, the Commission examined whether the disputed measures could be categorised as State aid within the meaning of Article 87(1) EC. Thus, in recitals 52 to 56 in the preamble to the contested decision, it stated that the case-law of the Court (Case 78/76 Steinike & Weinlig [1977] ECR 595 and Case 259/85 France v Commission [1987] ECR 4393, paragraph 23) required it to focus on the operation and effects of the aid scheme in order to ascertain whether it constituted aid within the meaning of Article 87(1) EC, and whether the obligatory or voluntary nature of those contributions played any part in the application of this principle. It further examined, in recitals 57 to 61 in the preamble to that decision, the case-law concerning the concept of State resources (Case C-345/02 Pearle and Others [2004] ECR I-7139 and Case T-136/05 Salvat père & fils and Others v Commission [2007] ECR II-4063) and took the view that that did not call that principle into question. Finally, it pointed out in recital 61 in the preamble to the contested decision that, in the present case, although the contributions were voluntary, there was a strong public incentive to participate in that initiative. It therefore concluded, in recital 62 in the preamble to that decision, that the disputed measures constituted State aid within the meaning of Article 87(1) EC. |
| --- | --- |

44

In recitals 43 to 62 in the preamble to the contested decision, the Commission examined whether the disputed measures could be categorised as State aid within the meaning of Article 87(1) EC. Thus, in recitals 52 to 56 in the preamble to the contested decision, it stated that the case-law of the Court (Case 78/76 Steinike & Weinlig [1977] ECR 595 and Case 259/85 France v Commission [1987] ECR 4393, paragraph 23) required it to focus on the operation and effects of the aid scheme in order to ascertain whether it constituted aid within the meaning of Article 87(1) EC, and whether the obligatory or voluntary nature of those contributions played any part in the application of this principle. It further examined, in recitals 57 to 61 in the preamble to that decision, the case-law concerning the concept of State resources (Case C-345/02 Pearle and Others [2004] ECR I-7139 and Case T-136/05 Salvat père & fils and Others v Commission [2007] ECR II-4063) and took the view that that did not call that principle into question. Finally, it pointed out in recital 61 in the preamble to the contested decision that, in the present case, although the contributions were voluntary, there was a strong public incentive to participate in that initiative. It therefore concluded, in recital 62 in the preamble to that decision, that the disputed measures constituted State aid within the meaning of Article 87(1) EC.

Steinike & Weinlig

France

Commission

Pearle and Others

Salvat père & fils and Others

Commission

| 45 | The mere fact that the case-law to which the Commission has referred in the contested decision concerned only obligatory contributions cannot suffice to show that the reasons given for it were inadequate. Firstly, it must be borne in mind that the European Union Courts have never considered whether measures financed by both State contributions and voluntary contributions from professionals in a sector could constitute State aid within the meaning of Article 87(1) EC. Furthermore, the Commission stated in the contested decision that it took the view that the case-law relating to obligatory contributions applied to the disputed measures at issue, since the optional nature of the contributions in the present case was essentially a formality, since there was a strong incentive for the farmers to participate in the initiative. Moreover, the fact that that statement was made by the Commission in recital 61 in the preamble to the contested decision and not after recital 55 cannot, contrary to the submissions of the French Republic, affect the clarity of the reasoning set out by the Commission. |
| --- | --- |

45

The mere fact that the case-law to which the Commission has referred in the contested decision concerned only obligatory contributions cannot suffice to show that the reasons given for it were inadequate. Firstly, it must be borne in mind that the European Union Courts have never considered whether measures financed by both State contributions and voluntary contributions from professionals in a sector could constitute State aid within the meaning of Article 87(1) EC. Furthermore, the Commission stated in the contested decision that it took the view that the case-law relating to obligatory contributions applied to the disputed measures at issue, since the optional nature of the contributions in the present case was essentially a formality, since there was a strong incentive for the farmers to participate in the initiative. Moreover, the fact that that statement was made by the Commission in recital 61 in the preamble to the contested decision and not after recital 55 cannot, contrary to the submissions of the French Republic, affect the clarity of the reasoning set out by the Commission.

| 46 | The contested decision therefore discloses in a sufficiently clear and unequivocal fashion the reasoning followed by the Commission in order to ascertain whether the measures financed by both State contributions and voluntary contributions from professionals in a sector could, in its opinion, constitute State aid within the meaning of Article 87(1) EC, in such a way as to enable the General Court to review the legality of the measure and the persons concerned to ascertain the reasons for the measure, so that they can defend their rights and ascertain whether or not the decision is well founded. |
| --- | --- |

46

The contested decision therefore discloses in a sufficiently clear and unequivocal fashion the reasoning followed by the Commission in order to ascertain whether the measures financed by both State contributions and voluntary contributions from professionals in a sector could, in its opinion, constitute State aid within the meaning of Article 87(1) EC, in such a way as to enable the General Court to review the legality of the measure and the persons concerned to ascertain the reasons for the measure, so that they can defend their rights and ascertain whether or not the decision is well founded.

| 47 | It follows from the foregoing that the first plea in law, alleging insufficient reasoning of the contested decision, must be rejected. |
| --- | --- |

47

It follows from the foregoing that the first plea in law, alleging insufficient reasoning of the contested decision, must be rejected.

The second plea in law, alleging an error of law in that the Commission categorised measures financed by voluntary contributions from the sector concerned as State aid within the meaning of Article 87(1) EC

The second plea in law, alleging an error of law in that the Commission categorised measures financed by voluntary contributions from the sector concerned as State aid within the meaning of Article 87(1) EC

| 48 | The French Republic is of the opinion that the Commission erred in law by categorising measures financed by voluntary contributions from the sector concerned as State aid within the meaning of Article 87(1) EC. |
| --- | --- |

48

The French Republic is of the opinion that the Commission erred in law by categorising measures financed by voluntary contributions from the sector concerned as State aid within the meaning of Article 87(1) EC.

Admissibility of arguments relating to facts not challenged during the administrative phase

| 49 | As a preliminary point, the Commission argues that the French Republic cannot challenge before the General Court the comments made by Fedecom in its observations of 20 October 2005 concerning the respective roles of the professionals and Oniflhor in defining the amount of the sectoral contribution and the disputed measures and in the implementation of those measures. |
| --- | --- |

49

As a preliminary point, the Commission argues that the French Republic cannot challenge before the General Court the comments made by Fedecom in its observations of 20 October 2005 concerning the respective roles of the professionals and Oniflhor in defining the amount of the sectoral contribution and the disputed measures and in the implementation of those measures.

| 50 | Firstly, it is of the opinion that the French Republic should have raised that plea, since it relates to an error of fact or to a manifest error of assessment, separately from the plea alleging an error of law. However, it is apparent from the written submissions of the French Republic that it sought to use that evidence as arguments in support of its plea alleging that the Commission erred in law by categorising measures financed by voluntary contributions from the sector concerned as State aid within the meaning of Article 87(1) EC. |
| --- | --- |

50

Firstly, it is of the opinion that the French Republic should have raised that plea, since it relates to an error of fact or to a manifest error of assessment, separately from the plea alleging an error of law. However, it is apparent from the written submissions of the French Republic that it sought to use that evidence as arguments in support of its plea alleging that the Commission erred in law by categorising measures financed by voluntary contributions from the sector concerned as State aid within the meaning of Article 87(1) EC.

| 51 | Secondly, the Commission submits that those arguments are inadmissible, since the French Republic raised no objections to the comments made by Fedecom in its observations of 20 October 2005 during the formal investigation procedure. |
| --- | --- |

51

Secondly, the Commission submits that those arguments are inadmissible, since the French Republic raised no objections to the comments made by Fedecom in its observations of 20 October 2005 during the formal investigation procedure.

| 52 | In accordance with consistent case-law, a Member State which has granted or seeks to be allowed to grant aid under one of the exceptions provided for in the Treaty rules has a duty to cooperate with the Commission in the proceeding in which it takes part, pursuant to which it must in particular provide all the information necessary to enable the Commission to verify that the conditions for the derogation sought are fulfilled (Case C-364/90 Italy v Commission [1993] ECR I-2097, paragraph 20; Joined Cases T-132/96 and T-143/96 Freistaat Sachsen and Others v Commission [1999] ECR II-3663, paragraph 140; and Case T-25/07 Iride and Iride Energia v Commission [2009] ECR II-245, paragraph 100). The legality of a decision concerning State aid falls to be assessed in the light of the information available to the Commission at the time when the decision was adopted (Case C-197/99 P Belgium v Commission [2003] ECR I-8461, paragraph 86; see, to that effect, Case 234/84 Belgium v Commission [1986] ECR 2263, paragraph 16). It follows therefrom in particular that, since the concept of State aid must be applied to an objective situation appraised on the date on which the Commission takes its decision, it is the appraisals carried out on that date which must be taken into account in the conduct of the review referred to above (Chronopost and La Poste v UFEX and Others, paragraph 144). Thus, where there is no information to the contrary from interested parties, the Commission is empowered to take as its basis the factual elements it has at the time it adopts its final decision, even if they are incorrect, provided that the factual elements in question were the subject of an information injunction issued by the Commission to the Member State to provide it with the necessary information (Case T-318/00 Freistaat Thuringen v Commission [2005] ECR II-4179, paragraph 88). |
| --- | --- |

52

In accordance with consistent case-law, a Member State which has granted or seeks to be allowed to grant aid under one of the exceptions provided for in the Treaty rules has a duty to cooperate with the Commission in the proceeding in which it takes part, pursuant to which it must in particular provide all the information necessary to enable the Commission to verify that the conditions for the derogation sought are fulfilled (Case C-364/90 Italy v Commission [1993] ECR I-2097, paragraph 20; Joined Cases T-132/96 and T-143/96 Freistaat Sachsen and Others v Commission [1999] ECR II-3663, paragraph 140; and Case T-25/07 Iride and Iride Energia v Commission [2009] ECR II-245, paragraph 100). The legality of a decision concerning State aid falls to be assessed in the light of the information available to the Commission at the time when the decision was adopted (Case C-197/99 P Belgium v Commission [2003] ECR I-8461, paragraph 86; see, to that effect, Case 234/84 Belgium v Commission [1986] ECR 2263, paragraph 16). It follows therefrom in particular that, since the concept of State aid must be applied to an objective situation appraised on the date on which the Commission takes its decision, it is the appraisals carried out on that date which must be taken into account in the conduct of the review referred to above (Chronopost and La Poste v UFEX and Others, paragraph 144). Thus, where there is no information to the contrary from interested parties, the Commission is empowered to take as its basis the factual elements it has at the time it adopts its final decision, even if they are incorrect, provided that the factual elements in question were the subject of an information injunction issued by the Commission to the Member State to provide it with the necessary information (Case T-318/00 Freistaat Thuringen v Commission [2005] ECR II-4179, paragraph 88).

Italy

Commission

Freistaat Sachsen and Others

Commission

Iride and Iride Energia

Commission

Belgium

Commission

Belgium

Commission

Chronopost and La Poste

UFEX and Others

Freistaat Thuringen

Commission

| 53 | It is apparent from Article 13(1) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ 1999 L 83, p. 1) that, at the end of the formal investigation procedure into unlawful aid, the decision shall be taken by the Commission on the basis of the information available, in particular that supplied by the Member State in response to the Commission’s requests for information. |
| --- | --- |

53

It is apparent from Article 13(1) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ 1999 L 83, p. 1) that, at the end of the formal investigation procedure into unlawful aid, the decision shall be taken by the Commission on the basis of the information available, in particular that supplied by the Member State in response to the Commission’s requests for information.

| 54 | In the present case, it is clear from the contested decision that Fedecom submitted its observations on 20 October 2005 as an interested third party, describing, inter alia, the composition, payment methods and role of the approved economic agricultural committees in the allocation of the aid in question, and that those observations were sent to the French authorities on 1 December 2005 with the information that they had a period of one month in which to submit their own observations. The French authorities did not challenge those observations in their letter of 28 December 2005, by which they also gave permission for their letters of 26 December 2002 and 22 July 2003 to be sent to Fedecom and made a correction as regards the amount of aid paid in 2002. |
| --- | --- |

54

In the present case, it is clear from the contested decision that Fedecom submitted its observations on 20 October 2005 as an interested third party, describing, inter alia, the composition, payment methods and role of the approved economic agricultural committees in the allocation of the aid in question, and that those observations were sent to the French authorities on 1 December 2005 with the information that they had a period of one month in which to submit their own observations. The French authorities did not challenge those observations in their letter of 28 December 2005, by which they also gave permission for their letters of 26 December 2002 and 22 July 2003 to be sent to Fedecom and made a correction as regards the amount of aid paid in 2002.

| 55 | It follows from the principles cited in paragraphs 52 and 53 above that the French Republic cannot for the first time at the judicial stage challenge the contents of factual observations made by an interested third party during the administrative procedure, when in fact the observations had been sent to it. The mere fact that it did not react to those facts since it shared the conclusions reached by Fedecom is not sufficient for it to avoid the principle of effectiveness of the administrative procedure. |
| --- | --- |

55

It follows from the principles cited in paragraphs 52 and 53 above that the French Republic cannot for the first time at the judicial stage challenge the contents of factual observations made by an interested third party during the administrative procedure, when in fact the observations had been sent to it. The mere fact that it did not react to those facts since it shared the conclusions reached by Fedecom is not sufficient for it to avoid the principle of effectiveness of the administrative procedure.

| 56 | The arguments advanced by the French Republic challenging the comments made by Fedecom in its observations of 20 October 2005 regarding the respective roles of professionals and Oniflhor in the definition of the amount of the sectoral contribution and the disputed measures and in the implementation of those measures must be rejected as inadmissible. |
| --- | --- |

56

The arguments advanced by the French Republic challenging the comments made by Fedecom in its observations of 20 October 2005 regarding the respective roles of professionals and Oniflhor in the definition of the amount of the sectoral contribution and the disputed measures and in the implementation of those measures must be rejected as inadmissible.

General principles relating to the concept of State resources

| 57 | It must be borne in mind that, under Article 87(1) EC, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods, in so far as it affects trade between Member States, is incompatible with the common market. |
| --- | --- |

57

It must be borne in mind that, under Article 87(1) EC, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods, in so far as it affects trade between Member States, is incompatible with the common market.

| 58 | For advantages to be capable of being categorised as aid within the meaning of that article, they must, first, be granted directly or indirectly through State resources, and, second, be imputable to the State (Case C-303/88 Italy v Commission [1991] ECR I-1433, paragraph 11; Case C-482/99 France v Commission [2002] ECR I-4397, paragraph 24; Case C-126/01 GEMO [2003] ECR I-13769, paragraph 24). |
| --- | --- |

58

For advantages to be capable of being categorised as aid within the meaning of that article, they must, first, be granted directly or indirectly through State resources, and, second, be imputable to the State (Case C-303/88 Italy v Commission [1991] ECR I-1433, paragraph 11; Case C-482/99 France v Commission [2002] ECR I-4397, paragraph 24; Case C-126/01 GEMO [2003] ECR I-13769, paragraph 24).

Italy

Commission

France

Commission

GEMO

| 59 | Moreover, it follows from the wording of Article 87(1) EC that only advantages granted directly or indirectly through State resources are to be considered aid. The distinction made in that provision between ‘aid granted by a Member State’ and aid granted ‘through State resources’ does not signify that all advantages granted by a State, whether financed through State resources or not, constitute aid, but is intended merely to bring within that definition both advantages which are granted directly by the State and those granted by a public or private body designated or established by the State (Case C-379/98 PreussenElektra [2001] ECR I-2099, paragraph 58). |
| --- | --- |

59

Moreover, it follows from the wording of Article 87(1) EC that only advantages granted directly or indirectly through State resources are to be considered aid. The distinction made in that provision between ‘aid granted by a Member State’ and aid granted ‘through State resources’ does not signify that all advantages granted by a State, whether financed through State resources or not, constitute aid, but is intended merely to bring within that definition both advantages which are granted directly by the State and those granted by a public or private body designated or established by the State (Case C-379/98 PreussenElektra [2001] ECR I-2099, paragraph 58).

PreussenElektra

| 60 | Furthermore, it should be noted that it follows from the case-law of the Court of Justice that Article 87(1) EC covers all the financial means by which the public authorities may actually support undertakings, irrespective of whether or not those means are permanent assets of the public sector. Consequently, even though the sums involved in the measure at issue are not held permanently by the public authorities, the fact that they remain constantly under public control, and therefore available to the competent national authorities, is sufficient for them to be categorised as State resources (see, to that effect, Case C-83/98 P France v Ladbroke Racing and Commission [2000] ECR I-3271, paragraph 50, and Case C-482/99 France v Commission, paragraph 37). Similarly, the originally private nature of the resources does not prevent them being regarded as State resources within the meaning of Article 87(1) EC (see, to that effect, Case T-358/94 Air France v Commission [1996] ECR II-2109, paragraphs 63 to 65). |
| --- | --- |

60

Furthermore, it should be noted that it follows from the case-law of the Court of Justice that Article 87(1) EC covers all the financial means by which the public authorities may actually support undertakings, irrespective of whether or not those means are permanent assets of the public sector. Consequently, even though the sums involved in the measure at issue are not held permanently by the public authorities, the fact that they remain constantly under public control, and therefore available to the competent national authorities, is sufficient for them to be categorised as State resources (see, to that effect, Case C-83/98 P France v Ladbroke Racing and Commission [2000] ECR I-3271, paragraph 50, and Case C-482/99 France v Commission, paragraph 37). Similarly, the originally private nature of the resources does not prevent them being regarded as State resources within the meaning of Article 87(1) EC (see, to that effect, Case T-358/94 Air France v Commission [1996] ECR II-2109, paragraphs 63 to 65).

France

Ladbroke Racing and Commission

France

Commission

Air France

Commission

| 61 | In accordance with the case-law, the mere fact that a subsidy scheme benefiting certain economic operators in a given sector is wholly or partially financed by contributions imposed by the public authority and levied on the undertakings concerned is not sufficient to take away from that scheme its status of aid granted by the State within the meaning of Article 87(1) EC (Steinike & Weinlig, paragraph 22; Case 259/85 France v Commission, paragraph 23; see, to that effect, Case 173/73 Italy v Commission [1974] ECR 709, paragraphs 13 and 16). |
| --- | --- |

61

In accordance with the case-law, the mere fact that a subsidy scheme benefiting certain economic operators in a given sector is wholly or partially financed by contributions imposed by the public authority and levied on the undertakings concerned is not sufficient to take away from that scheme its status of aid granted by the State within the meaning of Article 87(1) EC (Steinike & Weinlig, paragraph 22; Case 259/85 France v Commission, paragraph 23; see, to that effect, Case 173/73 Italy v Commission [1974] ECR 709, paragraphs 13 and 16).

Steinike & Weinlig

France

Commission

Italy

Commission

| 62 | Conversely, the Court of Justice has refused to categorise as State resources funds collected by a public body by way of contributions taken only from the economic operators who benefit from the measures in question but which have never been made available to the national authorities and which were used to finance specific actions by those operators alone (see, to that effect, Pearle and Others, paragraphs 36 to 39). |
| --- | --- |

62

Conversely, the Court of Justice has refused to categorise as State resources funds collected by a public body by way of contributions taken only from the economic operators who benefit from the measures in question but which have never been made available to the national authorities and which were used to finance specific actions by those operators alone (see, to that effect, Pearle and Others, paragraphs 36 to 39).

Pearle and Others

| 63 | Thus, the relevant criterion in order to assess whether the resources are public, whatever their initial origin, is that of the degree of intervention of the public authority in the definition of the measures in question and their methods of financing. |
| --- | --- |

63

Thus, the relevant criterion in order to assess whether the resources are public, whatever their initial origin, is that of the degree of intervention of the public authority in the definition of the measures in question and their methods of financing.

| 64 | The mere fact that the contributions of the economic operators concerned to the partial financing of the measures in question are only voluntary and not obligatory is not sufficient to call that principle into question. The degree of intervention of the public authority as regards those contributions may be great, even where those contributions are not obligatory. |
| --- | --- |

64

The mere fact that the contributions of the economic operators concerned to the partial financing of the measures in question are only voluntary and not obligatory is not sufficient to call that principle into question. The degree of intervention of the public authority as regards those contributions may be great, even where those contributions are not obligatory.

| 65 | It follows from all the foregoing that, in order to ascertain whether the Commission erred in law by categorising the disputed measures as State aid within the meaning of Article 87(1) EC, the role of the public authority in defining those measures and their methods of financing must be examined. |
| --- | --- |

65

It follows from all the foregoing that, in order to ascertain whether the Commission erred in law by categorising the disputed measures as State aid within the meaning of Article 87(1) EC, the role of the public authority in defining those measures and their methods of financing must be examined.

| 66 | As regards the assessment of the role of the public authority in the definition of the disputed measures, it is for the General Court to make an overall assessment, without it being possible to draw a distinction according to their method of financing, since the public and private contributions have been put together and mixed in an operational fund. |
| --- | --- |

66

As regards the assessment of the role of the public authority in the definition of the disputed measures, it is for the General Court to make an overall assessment, without it being possible to draw a distinction according to their method of financing, since the public and private contributions have been put together and mixed in an operational fund.

Examination of the operation of the contingency plans scheme

| 67 | Primarily, it is appropriate to examine the operation of the scheme of the disputed measures, and in particular the determination of the amount of the public and private contributions to finance them and the definition of their conditions of use. |
| --- | --- |

67

Primarily, it is appropriate to examine the operation of the scheme of the disputed measures, and in particular the determination of the amount of the public and private contributions to finance them and the definition of their conditions of use.

| 68 | Firstly, as regards the determination of the amount of the public and private contributions to finance the disputed measures, it is apparent from the file, and in particular from the letter from Fedecom of 20 October 2005, that Oniflhor, a public industrial and commercial institution under the supervision of the State, decided unilaterally on the sums allocated to the contingency plans and on the amount of the contributions which the approved economic agricultural committees were to pay in respect of the contingency plans. Those contributions were fixed by Oniflhor, which set a percentage of the quantity or value of the fruit and vegetables actually sold by the beneficiary farmers, and were called for by the approved economic agriculture committees from the national sections for each product, which then paid them to Oniflhor. It then supplemented those sums with public aid representing 50% to 70% of the total aid. In the event of non-payment of the sectoral contribution by the farmers, the aid allocated by Oniflhor was not paid to the farmers and remained frozen at the level of the approved economic agricultural committees, which were required to reimburse it to Oniflhor. |
| --- | --- |

68

Firstly, as regards the determination of the amount of the public and private contributions to finance the disputed measures, it is apparent from the file, and in particular from the letter from Fedecom of 20 October 2005, that Oniflhor, a public industrial and commercial institution under the supervision of the State, decided unilaterally on the sums allocated to the contingency plans and on the amount of the contributions which the approved economic agricultural committees were to pay in respect of the contingency plans. Those contributions were fixed by Oniflhor, which set a percentage of the quantity or value of the fruit and vegetables actually sold by the beneficiary farmers, and were called for by the approved economic agriculture committees from the national sections for each product, which then paid them to Oniflhor. It then supplemented those sums with public aid representing 50% to 70% of the total aid. In the event of non-payment of the sectoral contribution by the farmers, the aid allocated by Oniflhor was not paid to the farmers and remained frozen at the level of the approved economic agricultural committees, which were required to reimburse it to Oniflhor.

| 69 | Unlike other contributions received by the approved economic agricultural committees, those were not obligatory, as shown by the fact that certain farmers’ organisations refused to pay them. Accordingly, those contributions could not be governed by the provisions of the Rural Code on obligatory contributions. |
| --- | --- |

69

Unlike other contributions received by the approved economic agricultural committees, those were not obligatory, as shown by the fact that certain farmers’ organisations refused to pay them. Accordingly, those contributions could not be governed by the provisions of the Rural Code on obligatory contributions.

| 70 | It follows from the provisions of Articles R*553-2 and R*553-6 of the Rural Code that they refer only to the enrolment fees and the operational contributions obligatorily paid by the farmers to the recognised farmers groups and to the approved economic agricultural committees. The French Republic cannot therefore rely on the rules relating to the adoption of those enrolment fees and those contributions by recognised farmers groups, as defined in Article R*553-5 of the Rural Code. |
| --- | --- |

70

It follows from the provisions of Articles R*553-2 and R*553-6 of the Rural Code that they refer only to the enrolment fees and the operational contributions obligatorily paid by the farmers to the recognised farmers groups and to the approved economic agricultural committees. The French Republic cannot therefore rely on the rules relating to the adoption of those enrolment fees and those contributions by recognised farmers groups, as defined in Article R*553-5 of the Rural Code.

| 71 | Similarly, Article R*553-7 of the Rural Code, which provides that when an approved economic agricultural committee has obtained an extension of a rule drafted for the farmers and groups under its aegis to all of the farmers of its area, farmers for which that rule has become obligatory must pay, pursuant to a Ministerial Decree, all or part of the contributions based on the value of the sold production, was not applicable to contributions intended to finance the contingency plans. It must be borne in mind in that regard that the case-law regards as unlawful any obligation on non-affiliated farmers to participate in the financing of a fund instituted by a farmers’ organisation in so far as it serves to finance activities which are themselves held to be contrary to Community law (Case 218/85 Cerafel [1986] ECR 3513, paragraph 22). |
| --- | --- |

71

Similarly, Article R*553-7 of the Rural Code, which provides that when an approved economic agricultural committee has obtained an extension of a rule drafted for the farmers and groups under its aegis to all of the farmers of its area, farmers for which that rule has become obligatory must pay, pursuant to a Ministerial Decree, all or part of the contributions based on the value of the sold production, was not applicable to contributions intended to finance the contingency plans. It must be borne in mind in that regard that the case-law regards as unlawful any obligation on non-affiliated farmers to participate in the financing of a fund instituted by a farmers’ organisation in so far as it serves to finance activities which are themselves held to be contrary to Community law (Case 218/85 Cerafel [1986] ECR 3513, paragraph 22).

Cerafel

| 72 | Furthermore, the French Republic cannot rely on the provisions of Article 15 of Regulation No 2200/96 on the common organisation of the market in fruit and vegetables. Although the operational programmes implemented under that provision had in common with the contingency plans the simple fact that they were co-financed by a public authority and by contributions from farmer members based on the quantities or value of the fruit and vegetables sold, it is established that those provisions did not apply to the disputed measures but only to measures adopted in the context of the common organisation of the market in fruit and vegetables. |
| --- | --- |

72

Furthermore, the French Republic cannot rely on the provisions of Article 15 of Regulation No 2200/96 on the common organisation of the market in fruit and vegetables. Although the operational programmes implemented under that provision had in common with the contingency plans the simple fact that they were co-financed by a public authority and by contributions from farmer members based on the quantities or value of the fruit and vegetables sold, it is established that those provisions did not apply to the disputed measures but only to measures adopted in the context of the common organisation of the market in fruit and vegetables.

| 73 | Finally, in any event, the French Republic has not provided any other evidence which would enable the view to be taken that the amount of the contribution paid by the farmers was defined by them. |
| --- | --- |

73

Finally, in any event, the French Republic has not provided any other evidence which would enable the view to be taken that the amount of the contribution paid by the farmers was defined by them.

| 74 | It follows from all the foregoing that it is Oniflhor which decided unilaterally on the amount of the contributions paid by the approved economic agricultural committees and the total amounts allocated to the contingency plans. |
| --- | --- |

74

It follows from all the foregoing that it is Oniflhor which decided unilaterally on the amount of the contributions paid by the approved economic agricultural committees and the total amounts allocated to the contingency plans.

| 75 | Secondly, as regards the definition of the content of the disputed measures and the manner in which they are implemented, it is apparent from the file, and in particular from the information sent by Fedecom on 20 October 2005, that the disputed measures were determined by Oniflhor by means of decisions bearing the stamp of its director and the State financial controller and auditor and that the approved economic agricultural committees take no part in their definition and have no discretion in their application. |
| --- | --- |

75

Secondly, as regards the definition of the content of the disputed measures and the manner in which they are implemented, it is apparent from the file, and in particular from the information sent by Fedecom on 20 October 2005, that the disputed measures were determined by Oniflhor by means of decisions bearing the stamp of its director and the State financial controller and auditor and that the approved economic agricultural committees take no part in their definition and have no discretion in their application.

| 76 | The French Republic submits, however, that the Oniflhor decisions had no purpose other than formally recording the contributions which the professionals and the public authorities undertook to pay. |
| --- | --- |

76

The French Republic submits, however, that the Oniflhor decisions had no purpose other than formally recording the contributions which the professionals and the public authorities undertook to pay.

| 77 | Thus, it argues that the disputed measures were defined and implemented by the professionals alone and that the intervention of Oniflhor consisted merely of applying the decisions taken by them and participating in the financing thereof. It bases its arguments on two documents, produced for the first time at the stage of the reply, intended to show that the initiative for the contingency plans came from the economic agricultural committees. However, it is apparent from paragraph 55 above that the French Republic cannot challenge the accuracy of observations made by an interested third party during the administrative proceedings for the first time during the legal proceedings, when in fact those observations had been sent to it and it had not disputed their contents. |
| --- | --- |

77

Thus, it argues that the disputed measures were defined and implemented by the professionals alone and that the intervention of Oniflhor consisted merely of applying the decisions taken by them and participating in the financing thereof. It bases its arguments on two documents, produced for the first time at the stage of the reply, intended to show that the initiative for the contingency plans came from the economic agricultural committees. However, it is apparent from paragraph 55 above that the French Republic cannot challenge the accuracy of observations made by an interested third party during the administrative proceedings for the first time during the legal proceedings, when in fact those observations had been sent to it and it had not disputed their contents.

| 78 | In any event, it must be pointed out that those letters, sent by national product sections of two approved economic agricultural committees to Oniflhor in 2001, allow the conclusion to be drawn only that, twice during the period of infringement, approved economic agricultural committees submitted proposals to Oniflhor for measures to be adopted in respect of the contingency plans. They are not, however, sufficient to call into question the information sent by Fedecom on 20 October 2005, according to which the approved economic agricultural committees did not have the power to define the measures adopted in respect of the contingency plans, a task which fell exclusively to Oniflhor. |
| --- | --- |

78

In any event, it must be pointed out that those letters, sent by national product sections of two approved economic agricultural committees to Oniflhor in 2001, allow the conclusion to be drawn only that, twice during the period of infringement, approved economic agricultural committees submitted proposals to Oniflhor for measures to be adopted in respect of the contingency plans. They are not, however, sufficient to call into question the information sent by Fedecom on 20 October 2005, according to which the approved economic agricultural committees did not have the power to define the measures adopted in respect of the contingency plans, a task which fell exclusively to Oniflhor.

| 79 | Furthermore, it must be pointed out that the French Republic has accepted in its written submissions that the approved economic agricultural committees were required to apply the measures laid down in respect of the contingency plans as they were defined by the decision of the director of Oniflhor. The fact that this is explained by Oniflhor’s participation in the financing of those measures is irrelevant to the assessment of the degree of control exercised by the public authority over the implementation of those measures. |
| --- | --- |

79

Furthermore, it must be pointed out that the French Republic has accepted in its written submissions that the approved economic agricultural committees were required to apply the measures laid down in respect of the contingency plans as they were defined by the decision of the director of Oniflhor. The fact that this is explained by Oniflhor’s participation in the financing of those measures is irrelevant to the assessment of the degree of control exercised by the public authority over the implementation of those measures.

| 80 | Finally, the French Republic states that, unlike the situation in the case which gave rise to the judgment in Air France v Commission (paragraph 65), Oniflhor could not freely use the funds paid by the professionals, since those funds were managed by the approved economic agricultural committees. However, it is apparent from the case-law of the Court of Justice cited in paragraph 60 above that, even though the sums involved in the measure at issue are not held permanently by the public authorities, the fact that they remain constantly under public control, and therefore available to the competent national authorities, is sufficient for them to be categorised as State resources. |
| --- | --- |

80

Finally, the French Republic states that, unlike the situation in the case which gave rise to the judgment in Air France v Commission (paragraph 65), Oniflhor could not freely use the funds paid by the professionals, since those funds were managed by the approved economic agricultural committees. However, it is apparent from the case-law of the Court of Justice cited in paragraph 60 above that, even though the sums involved in the measure at issue are not held permanently by the public authorities, the fact that they remain constantly under public control, and therefore available to the competent national authorities, is sufficient for them to be categorised as State resources.

Air France

Commission

| 81 | In the present case, the State was indeed in a position, by the use of its dominant influence over the definition and implementation of the disputed measures, to guide the use of the resources provided to the approved economic agricultural committees to finance, as appropriate, specific advantages for certain farmers. |
| --- | --- |

81

In the present case, the State was indeed in a position, by the use of its dominant influence over the definition and implementation of the disputed measures, to guide the use of the resources provided to the approved economic agricultural committees to finance, as appropriate, specific advantages for certain farmers.

| 82 | It has been established that the approved economic agricultural committees had no discretion in the application of the measures defined by Oniflhor. |
| --- | --- |

82

It has been established that the approved economic agricultural committees had no discretion in the application of the measures defined by Oniflhor.

| 83 | Furthermore, it is apparent from a number of provisions of the Rural Code that the administrative authority had a far-reaching and regular power of audit over the sums at issue. Under Article R*553-10 of the Rural Code, audits by the Minister for Agriculture of the approved economic committees are to cover in particular the accounts and the regularity of the operations of those bodies and the use of the public aid received. To that effect, Article R*553-13 provides that officials of the Ministry of Agriculture, authorised by the Minister for Agriculture, are to have access to all the services of the approved economic agricultural committees and that they may see all documents, letters and accounting or administrative documents. |
| --- | --- |

83

Furthermore, it is apparent from a number of provisions of the Rural Code that the administrative authority had a far-reaching and regular power of audit over the sums at issue. Under Article R*553-10 of the Rural Code, audits by the Minister for Agriculture of the approved economic committees are to cover in particular the accounts and the regularity of the operations of those bodies and the use of the public aid received. To that effect, Article R*553-13 provides that officials of the Ministry of Agriculture, authorised by the Minister for Agriculture, are to have access to all the services of the approved economic agricultural committees and that they may see all documents, letters and accounting or administrative documents.

| 84 | Finally, it is appropriate to point to the predominant role played by the State in the approved economic agricultural committees, within which it is represented by the regional Préfet. It is apparent from the provisions of the Rural Code that an application for approval of an economic agricultural committee sent, pursuant to Article R*552-1 of that Code, to the Minister for Agriculture in order to receive public aid, must, pursuant to Article R*552-2 thereof, be accompanied by certain documents, including‘the committee’s bye-laws’, which must include clauses providing that the ‘rules issued by the committee shall not be applicable until they have been approved by the Minister for Agriculture’, a ‘[d]eclaration stating the nature and forms of aid likely to be granted, if applicable, to the committee members’ and the ‘[t]exts of the rules issued by the committee in accordance with the provisions of Article L.552-1’. Under Article R.552-10 of the Rural Code, an approved economic agricultural committee cannot issue new rules or amend rules already approved without the express agreement of the Minister for Agriculture. Moreover, Article R.552-11 of the Rural Code provides that the Minister for Agriculture is to designate a representative to each approved economic agricultural committee, who has the role of technical adviser to the committee, is to attend or be represented at, on the conditions laid down by the Minister for Agriculture, the meetings of the Board and the general meeting, and who may consult on site or have sent to him all documents concerning the activity of the committee or the bodies which are members thereof and is regularly to be kept informed of all decisions taken by the Board and the resolutions adopted at the general meeting. Similarly, Article 1 of the Decree of the Minister for Agriculture of 30 October 2000 concerning the method of State representation on the economic agricultural committees in the fruit and vegetable sector (JORF, 15 November 2000, p. 18079) provides that the regional Préfet or his representative is entitled to attend all meetings of the managing bodies of the approved economic agricultural committees at which decisions are to be adopted and that he is to receive all minutes of the debates and the proceedings drawn up in that regard. Article 2 of that text gives the State’s representative, who is, if necessary, to have the assistance of Oniflhor, the responsibility of ensuring that the tasks entrusted to those committees are carried out in accordance with the guidelines laid down in the legislative and regulatory texts and provides that, to that end, he is to make a obligatory examination of the decisions of the managing bodies of the committees, the general meeting or the Board before their implementation, and of the agreements concluded, where they seek to lay obligations on the committee members or where they establish the uses of national, as regards the operation of or investments in the sector of production, or Community public financing. The decisions concerned are not enforceable until they bear that approval. |
| --- | --- |

84

Finally, it is appropriate to point to the predominant role played by the State in the approved economic agricultural committees, within which it is represented by the regional Préfet. It is apparent from the provisions of the Rural Code that an application for approval of an economic agricultural committee sent, pursuant to Article R*552-1 of that Code, to the Minister for Agriculture in order to receive public aid, must, pursuant to Article R*552-2 thereof, be accompanied by certain documents, including‘the committee’s bye-laws’, which must include clauses providing that the ‘rules issued by the committee shall not be applicable until they have been approved by the Minister for Agriculture’, a ‘[d]eclaration stating the nature and forms of aid likely to be granted, if applicable, to the committee members’ and the ‘[t]exts of the rules issued by the committee in accordance with the provisions of Article L.552-1’. Under Article R.552-10 of the Rural Code, an approved economic agricultural committee cannot issue new rules or amend rules already approved without the express agreement of the Minister for Agriculture. Moreover, Article R.552-11 of the Rural Code provides that the Minister for Agriculture is to designate a representative to each approved economic agricultural committee, who has the role of technical adviser to the committee, is to attend or be represented at, on the conditions laid down by the Minister for Agriculture, the meetings of the Board and the general meeting, and who may consult on site or have sent to him all documents concerning the activity of the committee or the bodies which are members thereof and is regularly to be kept informed of all decisions taken by the Board and the resolutions adopted at the general meeting. Similarly, Article 1 of the Decree of the Minister for Agriculture of 30 October 2000 concerning the method of State representation on the economic agricultural committees in the fruit and vegetable sector (JORF, 15 November 2000, p. 18079) provides that the regional Préfet or his representative is entitled to attend all meetings of the managing bodies of the approved economic agricultural committees at which decisions are to be adopted and that he is to receive all minutes of the debates and the proceedings drawn up in that regard. Article 2 of that text gives the State’s representative, who is, if necessary, to have the assistance of Oniflhor, the responsibility of ensuring that the tasks entrusted to those committees are carried out in accordance with the guidelines laid down in the legislative and regulatory texts and provides that, to that end, he is to make a obligatory examination of the decisions of the managing bodies of the committees, the general meeting or the Board before their implementation, and of the agreements concluded, where they seek to lay obligations on the committee members or where they establish the uses of national, as regards the operation of or investments in the sector of production, or Community public financing. The decisions concerned are not enforceable until they bear that approval.

| 85 | The French Republic has accepted that the State has an extensive role in the operation of the approved economic agricultural committees. The fact that the reason for that role is that it is possible for those committees to make their rules obligatory for all farmers in the region concerned is irrelevant to the assessment of the State presence within the committees. |
| --- | --- |

85

The French Republic has accepted that the State has an extensive role in the operation of the approved economic agricultural committees. The fact that the reason for that role is that it is possible for those committees to make their rules obligatory for all farmers in the region concerned is irrelevant to the assessment of the State presence within the committees.

| 86 | Furthermore, the French Republic submits that, although the representative of the regional Préfet attends the meetings of the managing bodies of an economic agricultural committee, he does not, however, take part in the decisions adopted by those bodies. However, it is apparent from the provisions cited above of Article 2 of the Decree of the Minister for Agriculture of 30 October 2000 that the decisions of the managing bodies of the committees and the agreements concerning the use of public financing were only enforceable if they bore the approval of the regional Préfet or his representative. |
| --- | --- |

86

Furthermore, the French Republic submits that, although the representative of the regional Préfet attends the meetings of the managing bodies of an economic agricultural committee, he does not, however, take part in the decisions adopted by those bodies. However, it is apparent from the provisions cited above of Article 2 of the Decree of the Minister for Agriculture of 30 October 2000 that the decisions of the managing bodies of the committees and the agreements concerning the use of public financing were only enforceable if they bore the approval of the regional Préfet or his representative.

| 87 | It follows from all the foregoing that it is Oniflhor which decided unilaterally on the measures to be financed by the contingency plans and how they should be implemented and that, although the approved economic agricultural committees had the task of managing the operational funds intended to finance those measures, they did not, however, have any discretion in their application. |
| --- | --- |

87

It follows from all the foregoing that it is Oniflhor which decided unilaterally on the measures to be financed by the contingency plans and how they should be implemented and that, although the approved economic agricultural committees had the task of managing the operational funds intended to finance those measures, they did not, however, have any discretion in their application.

| 88 | In conclusion, it must be held that the definition of the disputed measures and how they were financed was carried out by Oniflhor, a public industrial and commercial institution under the supervision of the State. Conversely, the beneficiaries of the measures had the power only to participate or not in the system thus defined by Oniflhor, by agreeing or refusing to pay the sectoral contribution which Oniflhor fixed. Accordingly, the view must be taken that the disputed measures constituted State aid within the meaning of Article 87(1) EC. |
| --- | --- |

88

In conclusion, it must be held that the definition of the disputed measures and how they were financed was carried out by Oniflhor, a public industrial and commercial institution under the supervision of the State. Conversely, the beneficiaries of the measures had the power only to participate or not in the system thus defined by Oniflhor, by agreeing or refusing to pay the sectoral contribution which Oniflhor fixed. Accordingly, the view must be taken that the disputed measures constituted State aid within the meaning of Article 87(1) EC.

| 89 | The second plea in law, alleging an error of law as regards the concept of State aid, must therefore be rejected and, accordingly, the action dismissed in its entirety. |
| --- | --- |

89

The second plea in law, alleging an error of law as regards the concept of State aid, must therefore be rejected and, accordingly, the action dismissed in its entirety.

Costs

Costs

| 90 | Under Article 87(2) of the Rules of Procedure of the Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. |
| --- | --- |

90

Under Article 87(2) of the Rules of Procedure of the Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

| 91 | Since the French Republic has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission. |
| --- | --- |

91

Since the French Republic has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

| | On those grounds,
  THE GENERAL COURT (Sixth Chamber)
  hereby: |
| --- | --- |

On those grounds,

THE GENERAL COURT (Sixth Chamber)

hereby:

| | 1. | Dismisses the action; |
| --- | --- | --- |

1.

1.

Dismisses the action;

Dismisses the action;

| | 2. | Orders the French Republic to pay the costs. |
| --- | --- | --- |

2.

2.

Orders the French Republic to pay the costs.

Orders the French Republic to pay the costs.

| | Kanninen
  
  
  Wahl
  
  
  Soldevila Fragoso
  
  
  Delivered in open court in Luxembourg on 27 September 2012.
  [Signatures] |
| --- | --- |

Kanninen

Wahl

Soldevila Fragoso

Delivered in open court in Luxembourg on 27 September 2012.

[Signatures]

---

(
  *1
  )	Language of the case: French.

*1