Judgment — ECLI:EU:C:2005:725
Date: 2005-12-01
Language of the case: English
Court formation: Second Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Economic, social and territorial cohesion;European Regional Development Fund (ERDF)
Concepts: Structural funds
Procedure: Action for annulment - successful
Origin: United Kingdom

summary of the pleas in law on which an application is based. For that purpose it is necessary that the alleged breaches should also be set out in a clear and comprehensible manner. 111. Consequently, the first plea must be rejected as unfounded. 2. Second plea: the conduct of the Commission a) Main submissions 112. By its second plea, the United Kingdom argues in essence that the Commission is precluded from objecting to the form and manner in which the application for payment was made because it did not inform the United Kingdom before the expiry of the prescribed period that the application did not meet the requirements of Article 52(5) of Regulation No 1260/1999. 113. Moreover, the Commission had a duty to inform the United Kingdom that the form of the application did not, in its opinion, satisfy the requirements in force. 114. The Commission’s failure to respond to the documents submitted on 15 and 21 March 2001 until the summer of 2001 gave rise to a legitimate expectation on the part of the applicant that all the conditions to be complied with by the application for payment of the balance had been met. 115. The Commission contends in reply, in factual terms, that its services did not at any time create the impression that the documents submitted by the time‑limit were sufficient in order to close the programme. It further states that its own conduct in relation to the automatic decommitment is in any case irrelevant. b) Legal analysis i) The effectiveness of the arguments 116. This plea must be rejected as ineffective. Even if the arguments are correct, the plea is incapable of leading to the annulment of the contested decision. 117. As the Court held in its judgment in Case C-46/98 P, (25) in an action for annulment, the effective nature of a plea which has been raised refers to its capacity, in the event that it is well founded, to lead to the annulment sought by an applicant. 118. Even if such a duty to inform existed and the Commission failed to discharge it, it does not necessarily follow that the United Kingdom submitted an application for final payment in compliance with the time‑limit. ii) The Commission’s duty to inform under the fourth subparagraph of Article 31(2) of Regulation No 1260/1999 119. For the sake of completeness, consideration must be given to the Commission’s duty to inform, which is expressly introduced by the fourth subparagraph of Article 31(2) of Regulation No 1260/1999, according to which the Commission must in any case inform the Member State and the paying authority in good time whenever there is a risk of application of the automatic decommitment provided for in the second subparagraph. 120. That provision does not apply to the programme in question here. Under the transitional provisions of Article 52 of Regulation No 1260/1999, assistance which was approved on the basis of Regulation No 2052/88 and Regulation No 4253/88 implementing it is not affected by Regulation No 1260/1999. The Commission’s duty under the fourth subparagraph of Article 31(2) of Regulation No 1260/1999 to draw attention to the risk of imminent decommitment applies only to future programmes. 121. However, the United Kingdom is not thereby placed at a disadvantage by the transitional provisions of Article 52 of Regulation No 1260/1999 because, as a result of Article 52(5), the period for the submission of applications for final payment is considerably extended as compared with the original period under Article 21(4) of Regulation No 4253/88. iii) Specific aspects of the Commission’s conduct 122. For the sake of completeness, I shall also examine below the allegations concerning the Commission’s conduct. 123. Even though the Commission’s conduct is not a model of clarity since, in particular after the time‑limit had passed, it was still making enquiries with regard to the conflicting information provided by the Member State and/or the GONW and was obviously itself no longer clear about the final financing plan, that does not alter the fact that the United Kingdom was in principle responsible for ensuring that, on the relevant date, the Commission had all the necessary reliable information on the expenditure to enable it to give a final decision concerning it. 124. Nor did the Commission at any time minimise or fraudulently conceal the consequence of automatic decommitment. On the contrary, as early as 31 July 2000 it gave notice that it intended to close the MST 2 programme. It thereby, for the first time, called indirectly on the United Kingdom to act. 125. Finally, no duty of any kind for the Commission to confirm individually the expiry of the period arises from the legal bases. Nor does any different conclusion follow from Article 10 EC, under which the Community institutions also have a duty to cooperate sincerely with the Member States. (26) Where the Commission omits to draw attention to the passing of a time-limit, that does not constitute disloyal conduct if the Member State was obviously in no doubt as to the obligation to comply with the time‑limit. (27) 126. Furthermore, with regard to the creation of a legitimate expectation, it should be noted that the contested decision of the Commission is based on a Council regulation, with the result that the Commission’s conduct cannot in any event be regarded as waiving self‑imposed procedural requirements. 3. Third plea: lack of reasoning for Commission Decision C (92) 1358/8 a) Arguments of the United Kingdom 127. By the third plea, the United Kingdom alleges that the Commission infringed the obligation to state reasons as laid down in Article 253 EC, since the decision of 22 November 2002 does not disclose the principal issues of fact and law on which it is based and which are necessary in order for the reasoning to be comprehensible. 128. In particular, there is no explanation whatsoever as to why the information communicated in February and March 2001 was not sufficient to constitute an application within the meaning of Article 52(5) of Regulation No 1260/1999. In addition, the Commission did not explain why closure of the programme was prevented by the alleged non‑compliance with the requirements to be met before the passing of the time‑limit. The Commission’s statement that ‘my services do not agree with the argument put forward concerning the final financial plan’ is wholly deficient and unintelligible. b) Arguments of the Commission 129. The Commission, by contrast, contends that the decision is properly reasoned since it complies with the requirements of Article 253 EC. The letter of 22 November 2002 must be read in the context of the correspondence exchanged with the United Kingdom, in particular the letters of 24 January, 18 April and 12 June 2002. The Commission’s view that no application for payment of the balance had been submitted by 31 March 2001 is expressed throughout that correspondence. 130. Moreover, in a letter of 12 June 2002, the United Kingdom finally acknowledged that no formal claim had been submitted by 31 March 2001. It was therefore aware of the reasons for the decision, even though there was no agreement regarding them. c) Legal analysis 131. The Court has consistently held that the statement of reasons for an act must, pursuant to Article 253 EC, disclose in a clear and unequivocal fashion the reasoning followed by the Community authority which adopted it in such a way as to make the persons concerned aware of the reasons for the measure and thus enable them to defend their rights and the Court to exercise its supervisory jurisdiction. The extent of the obligation to state reasons depends on the nature of the act concerned and the circumstances in which it was adopted and on all the legal rules governing the matter in question. (28) 132. In particular, the statement of reasons for a decision cancelling Community assistance must, in view of the serious consequences for the person benefiting from the assistance, set out clearly the grounds which justify the decision. (29) 133. It is true that the present case does not concern the cancellation of Community assistance. Nevertheless, it does concern subsequent refusal of support initially promised, namely payment of the balance of the funds committed within the ERDF for the MST 2 programme. 134. In the contested letter of 22 November 2002, the Commission stated essentially that it was obliged to take the decision to decommit because an application for payment, as required by Article 52(5) of Regulation No 1260/1999, had not been submitted by 31 March 2001. 135. The circumstances in which the decision was adopted confirm that that statement of reasons is sufficient. The duty to state reasons always requires less detailed explanations when the addressee of the decision is already clear as to the legal bases of the decision and their conditions. (30) As I have already stated, (31) the United Kingdom at least made it clear, before the expiry of the period, that it was aware of the tight deadlines under Article 52(5) of Regulation No 1260/1999. It must therefore be assumed that it was clear to the United Kingdom, notwithstanding the question disputed between the parties as to the continuance in force of the conditions under Article 10 of the Annex to Decision C (92) 1358/8, that failure to respect the time‑limit under Article 52(5) of Regulation No 1260/1999 would result in decommitment. 136. Finally, the conflicting views were discussed between the parties and the reasons for decommitment explained to the United Kingdom in the long exchange of correspondence between the parties, in particular the letters of 24 January, 18 April and 12 June 2002. 137. It follows from all of the foregoing that, in the specific circumstances of this case, the Commission provided a sufficient statement of reasons for its decision of 22 November 2002. 138. The third plea must therefore be rejected as unfounded. VI – Conclusion 139. In the light of the foregoing considerations, I propose that the Court should: – dismiss the application of the United Kingdom of Great Britain and Northern Ireland in its entirety; – order the United Kingdom of Great Britain and Northern Ireland to pay the costs of the proceedings. 1 – Original language: German. 2 – Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds (OJ 1999 L 161, p. 1, ‘Regulation No 1260/1999’). 3 – OJ 1988 L 374, p. 1 (‘Regulation No 4253/88’). 4 – See Article 54 of Regulation No 1260/1999. 5 – See point 18 above. 6 – See also the judgment of 9 December 2004 in Case C‑123/03 P Commission v Greencore Group [2004] ECR I‑0000, paragraph 44: ‘any measure which produces binding legal effects such as to affect the interests of an applicant by bringing about a distinct change in his legal position is an act or decision which may be the subject of an action under Article 230 EC for a declaration that it is void’. 7 – See Case 190/84 Parti écologiste ‘Les Verts’ v Parliament [1988] ECR 1017, paragraphs 7 and 8: ‘This action is brought against measures entering into commitments of expenditure … Such measures have only internal legal effects within the administration, and give rise to no rights or obligations on the part of third parties. They therefore do not constitute decisions adversely affecting any person.’ 8 – Case 23/80 Grasselli v Commission [1980] ECR 3709 and Case C-123/03 P, cited in footnote 6, paragraph 39. 9 – See Article 24(2) of Regulation No 4253/88. 10 – With regard to the constitutional issues which may be associated with this, see Nehl, Europäisches Verwaltungsverfahren und Gemeinschaftsverfassung, Berlin 2002. 11 – Recital 44 in the preamble to Regulation No 1260/1999 states that, to that end, any delays in financial implementation should give rise to repayment of advances and to automatic decommitments. 12 – Submission within the specified time of a request for payment of the balances, submission of a report as specified, transmission of a certificate confirming the information. 13 – Case 44/81 [1982] ECR 1855, paragraph 16. 14 – See point 75 above. 15 – See point 76 above. 16 – It should be recalled here that, in its judgment in Case C‑84/96 Netherlands v Commission [1999] ECR I‑6547, paragraph 57, the Court has already interpreted the concept of ‘application for final payment’ – albeit in connection with another legal basis – and in that respect held that – regardless of the question as to any confirmation of the information concerned – ‘requests for final payment submitted by the Member States must at least contain the information which the Commission needs in order to proceed with the final conclusion of those projects and payment of the sums claimed’. 17 – The provision thus distinguishes between those requirements which are to be complied with by the authority and those which are to be complied with by the Member State. 18 – Articles 10 and 14 of Regulation No 4253/88. 19 – Article 23 of Regulation No 4253/88. 20 – See also recital 43 in the preamble to Regulation No 1260/1999: ‘… sound financial management should be assured by providing that expenditure is to be duly justified and certified …’. 21 – It should be recalled here that, according to the Court’s case-law (Case C‑86/89 Italy v Commission [1990] ECR I‑3891, paragraph 20), for a decision to be valid in law, it is sufficient that its essential ground is well founded. Any flaws which might vitiate the other grounds of the decision have no bearing on the lawfulness of the decision. 22 – With regard to the absence of discretion in relation to automatic decommitments, see also Case C‑84/96 Netherlands v Commission, cited above in footnote 16. 23 – See point 75 above. 24 – See only Case 116/82 Commission v Germany [1986] ECR 2519 (‘Quality wine’), paragraph 21. 25 – European Fertilizer Manufacturers Association(EFMA) v Counciland Commission [2000] ECR I‑7079, paragraph 38. 26 – See Case 230/81 Luxembourg v Parliament [1983] ECR 255 and the order in Case C‑2/88 Imm. Zwartveld [1990] ECR I‑3365. 27 – In this connection, see also point 109 above. 28 – Case C-350/88 Delacreand Others [1990] ECR I‑395, paragraphs 15 and 16. 29 – See, to that effect, the judgment of the Court of First Instance in Joined Cases T‑46/98 and T-151/98 CEMR v Commission [2000] ECR II‑167, paragraph 48. 30 – In this context, reference should be made to the Court’s case‑law on the clearance of EAGGF accounts, according to which the involvement of a Member State in the process by which a decision is made is relevant with regard to the extent of the duty to state reasons. See, for example, Case 819/79 Germany v Commission [1981] ECR 21, paragraphs 19 to 21. 31 – See point 109 above.