Judgment — ECLI:EU:T:2003:248
Date: 2003-09-30
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition
Concepts: General
Procedure: Action for annulment - inadmissible
Origin: Italy

Summary of the Judgment 
1. General and final provisions — Powers of the Member States to adopt measures 
intended to ensure national security — Production and trade in armaments — 
Distortion of competition on the market for products not intended for specifically 
military purposes — Specific procedural regime established by Article 298 EC — 
Powers of the Commission — Limits 
(Arts 86(3) EC, 88 EC, 296(1)(b) EC and 298 EC) 
II - 3951 
SUMMARY — CASE T-26/01 
2. Actions for failure to act — Failure to act brought to an end before action brought — 
Inadmissible 
(Arts 232 EC and 233, first para., EC) 
1. The r e g i m e e s t a b l i s h e d by 
Article 296(1)(b) EC is intended to 
preserve the freedom of action of the 
Member States in certain matters 
affecting national defence and security. 
It has, for the activities which it covers 
and on the conditions which it sets 
forth, a general effect, capable of 
affecting all the ordinary legal provi­
sions of the Treaty, including those on 
the competition rules and, confers on 
the Member States a particularly wide 
discretion in assessing the needs receiv­
ing the protection of the essential 
interests of their security. The measures 
which they may adopt must not how­
ever adversely affect the conditions of 
competition in the common market 
regarding 'products which are not 
intended for specifically military pur­
poses'. 
It is thus that, where in favour of 
production or trade in arms, munitions 
or war material identified as such by 
the Council, a Member State adopts an 
aid measure on the basis of consider­
ations linked to the need to protect the 
essential interests of its national secur­
ity, so that the Commission cannot use 
the examination procedure laid down 
by Article 88 EC, the rules of com­
petition do not apply to such State aid. 
If it considers that the measure in 
question may cause distortion in com­
petition, the Commission undertakes 
with the Member State concerned a 
bilateral examination of that measure, 
without being able to address a final 
decision or directive to that State, but 
with the power to bring directly before 
the Court of Justice an action for 
failure to fulfil Treaty obligations, if it 
considers that the Member State has 
made improper use of the power pro­
vided for in Article 296 EC. 
(see paras 58-59, 63-64, 74) 
2. An action for failure to act is inadmiss­
ible where the Commission has defined 
its position, for the purposes of 
Article 232 EC, before the action was 
brought. A judgment which, in such 
circumstances, found that there had 
been a failure to act on the part of the 
defendant institution could not give 
rise to the measures for compliance 
referred to in the first paragraph of 
Article 233 EC. 
(see para. 92) 
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