Judgment — ECLI:EU:T:2000:306
Date: 2000-12-14
Language of the case: French
Court formation: Fourth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Financial provisions
Concepts: Commission
Procedure: Action for annulment - successful
Origin: France

Summary of the Judgment 
Commission — Powers — Implementation of the Community budget — Decision to 
effect set-off between a debt owed to the Commission and sums payable by way of 
Community contributions — Principles of effectiveness of Community law and of sound 
financial management — Breach 
(EC Treaty, Art. 205 (now Art. 274 EC)) 
II - 4099 
SUMMARY — CASE T-105/99 
In the absence of express rules on the right 
of the Commission, as the institution 
responsible for the implementation of the 
Community budget under Article 205 of 
the Treaty (now Article 274 EC), to effect 
set-off against entities to which Community 
funds are owed but which also owe sums of 
Community origin and in order to deter­
mine whether a Commission decision to 
effect such set-off has a legal basis, it is 
necessary to look to the rules of Commun­
ity law applicable to the activity of that 
institution and to refer to the case-law of 
the Court of Justice. In that context, it is 
necessary, in particular, to take account of 
the principle of the effectiveness of Com­
munity law and the principle of sound 
financial management. The principle of the 
effectiveness of Community law implies 
that the funds of the Community must be 
made available and used in accordance 
with their purpose. As regards the principle 
of sound financial management, it must not 
be reduced to a purely accounting defini­
tion which considers as essential the mere 
possibility of regarding a debt as formally 
paid. On the contrary, a correct interpreta­
tion of that principle must include a 
concern for the practical consequences of 
the acts of financial management, using as 
a reference point, in particular, the prin­
ciple of the effectiveness of Community 
law. 
A decision effecting set-off between a debt 
owed to the Commission and sums payable 
by way of Community contributions, 
which the Commission adopted without 
first ensuring that it did not pose a risk for 
the use of the funds for the purposes for 
which they were intended and for the 
carrying out of the activities at issue, when 
it could have acted otherwise without 
jeopardising the recovery of the applicant's 
alleged debt to it and the proper use of the 
sums concerned, does not fulfil those 
requirements and must therefore be 
annulled. 
(see paras 59-60, 73-75) 
II - 4100