62023CJ0632
JUDGMENT OF THE COURT (Eighth Chamber)
13 November 2025 (
*1
)
(Failure of a Member State to fulfil obligations – State aid – Aid declared unlawful and incompatible with the internal market – Second subparagraph of Article 108(2) TFEU – Forest land swap transactions – Obligation to recover – Obligation to provide information – Failure to comply)
In Case C‑632/23,
ACTION for failure to fulfil obligations under the second subparagraph of Article 108(2) TFEU, brought on 19 October 2023,
European Commission, represented by C. Georgieva, A. Steiblytė and B. Stromsky, acting as Agents,
applicant,
v
Republic of Bulgaria, represented by T. Mitova and R. Stoyanov, acting as Agents,
defendant,
THE COURT (Eighth Chamber),
composed of O. Spineanu-Matei (Rapporteur), President of the Chamber, S. Rodin and N. Fenger, Judges,
Advocate General: A. Rantos,
Registrar: R. Stefanova-Kamisheva, Administrator,
having regard to the written procedure and further to the hearing on 8 January 2025,
after hearing the Opinion of the Advocate General at the sitting on 27 March 2025,
gives the following
Judgment
1
By its action, the European Commission asks the Court to declare that, by failing to take, within the prescribed period, all the measures necessary to comply with Commission Decision (EU) 2015/456 of 5 September 2014 on the aid scheme No SA.26212 (11/C) (ex 11/NN – ex CP 176/A/08) and SA.26217 (11/C) (ex 11/NN – ex CP 176/B/08) implemented by the Republic of Bulgaria in the context of swaps of forest land (OJ 2015 L 80, p. 100), the Republic of Bulgaria has failed to fulfil its obligations under Articles 4 to 6 of that decision and under the FEU Treaty.
Legal framework
European Union law
Regulation (EU) No 1407/2013
2
Commission Regulation (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 [TFEU] to de minimis aid (OJ 2013 L 352, p. 1) provides, in Article 7(3):
‘Any individual de minimis aid granted between 1 January 2007 and 30 June 2014 and which fulfils the conditions of [Commission] Regulation (EC) No 1998/2006 [of 15 December 2006 on the application of Articles 107 and 108 TFEU to de minimis aid (OJ 2006 L 379, p. 5)] shall be deemed not to meet all the criteria in Article 107(1) [TFEU] and shall therefore be exempt from the notification requirement in Article 108(3) [TFEU].’
Regulation (EU) 2015/1589
3
Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9), codified and repealed Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1).
4
According to recital 25 of Regulation 2015/1589:
‘In cases of unlawful aid which is not compatible with the internal market, effective competition should be restored. For this purpose it is necessary that the aid, including interest, be recovered without delay. It is appropriate that recovery be effected in accordance with the procedures of national law. The application of those procedures should not, by preventing the immediate and effective execution of the [European] Commission decision, impede the restoration of effective competition. To achieve this result, Member States should take all necessary measures ensuring the effectiveness of the Commission decision.’
5
Article 16(3) of Regulation 2015/1589 provides:
‘Without prejudice to any order of the Court … pursuant to Article 278 TFEU, recovery shall be effected without delay and in accordance with the procedures under the national law of the Member State concerned, provided that they allow the immediate and effective execution of the Commission’s decision. To this effect and in the event of a procedure before national courts, the Member States concerned shall take all necessary steps which are available in their respective legal systems, including provisional measures, without prejudice to Union law.’
6
Article 35 of Regulation 2015/1589 provides:
‘Regulation (EC) No 659/1999 is repealed.
References to the repealed Regulation shall be construed as references to this Regulation and shall be read in accordance with the correlation table in Annex II.’
Bulgarian law
The Law on State Property
7
Article 32(2) of the Zakon za darzhavnata sobstvenost (Law on State Property, DV No 44 of 21 May 1996), in the version applicable to the main proceedings (‘the Law on State Property’), is worded as follows:
‘The equivalent cash compensation referred to in paragraph 1 shall be determined on the basis of the use of the land prior to the entry into force of the detailed land use plan, or prior to the approval of a detailed land use plan providing for the construction of a national project and for which there is an order in force allowing provisional execution, based on the market prices of land with similar characteristics located in the vicinity of the land subject to expropriation.’
8
Paragraph 1a of the dopalnitelni razporedbi na Zakon za darzhavnata sobstvenost (supplementary provisions to the Law on State Property) states:
‘For the purposes of this law:
…
(2) The “market price” is the average of the prices of all property transactions involving the purchase/sale, exchange, creation of real rights or transfer of ownership in return for a construction obligation, the creation of a mortgage (as security for the purchase/sale of a property), auctions by public and private bailiffs, State and municipal institutions, as well as other transactions for valuable consideration, with the exception of those involving theoretical shares of real estate, in which at least one of the parties is a trader, concluded within 12 months prior to the date of the valuation request and registered at the registry office of the place where the real estate is located. If, in the 12 months preceding the date of the valuation request, more than 20 transactions have been registered at the registry office of the place where the property is located, the market price is determined by taking into account the last 20 transactions registered. The average is calculated on the basis of at least two relevant transactions.
…
(4) “Properties located near those subject to expropriation” are properties that are located:
(a)
in the same district, within large cities that are divided into districts;
(b)
in the same neighbourhood, within other towns, inhabited centres or localities;
(c)
in the same territory in agricultural and forest areas.’
The Law on Forests
9
Paragraph 3 of the transitional and final provisions of the Zakon za gorite (Law on Forests, DV No 19 of 8 March 2011), in force since 2011, provides:
‘(1) No change of use may be made under this law, and no construction may be carried out on land located in forest areas that natural and legal persons or municipalities have acquired from the State as a result of exchanges made up to the date of promulgation of the law in the Darzhaven vestnik (Official Gazette).
(2) The prohibition referred to in subparagraph 1 shall also apply in the event of a change of ownership of the property, except in cases where the forest area concerned is acquired by the State.’
Background to the dispute and the pre-litigation procedure
Decision 2015/456
10
In 1947, forest lands in the Republic of Bulgaria were nationalised. After 2000, the Republic of Bulgaria began to return them to their former private owners. An amendment to the Law on Forests, which entered into force on 22 February 2002, allowed for the swap of privatised forest land for forest land belonging to that Member State. The prices of the land swapped were determined on the basis of criteria laid down in Bulgarian legislation.
11
Following a complaint received in 2008 alleging illegal State aid in connection with forest land swaps, the Commission notified the Republic of Bulgaria by letter dated 29 June 2011 of its decision to initiate the formal investigation procedure laid down in Article 108(2) TFEU.
12
The period covered by the contested swap transactions under consideration runs from 1 January 2007 to 27 January 2009, as a ban on forest land swaps came into force on 27 January 2009.
13
In Decision 2015/456, the Commission found that the Republic of Bulgaria had granted State aid declared unlawful and incompatible with the internal market to undertakings in the context of the swap of state-owned forest land for privately owned forest land during the period from 1 January 2007 to 27 January 2009, covering 132 swap transactions. In that regard, it considered that the swap transactions carried out by the Republic of Bulgaria during that period constituted State aid within the meaning of Article 107(1) TFEU, where the other party to the swap transaction concerned was an undertaking within the meaning of that provision, the administrative prices used for that transaction did not reflect market prices and the conditions for de minimis aid, laid down in Regulation No 1407/2013, were not met. The Commission considered, however, that the decision of a public authority to change, following a swap transaction, the use of a specific plot of land so that the land concerned would then become building land did not constitute State aid within the meaning of Article 107(1) TFEU.
14
Articles 1 and 4 to 6 of Decision 2015/456 are worded as follows:
‘Article 1
The State aid, granted to undertakings in the context of swap transactions of publicly owned forest land in return for privately owned forest land in the period from 1 January 2007 until 27 January 2009, unlawfully put into effect by the Republic of Bulgaria in breach of Article 108(3) [TFEU], is incompatible with the internal market.
…
Article 4
1.   The Republic of Bulgaria shall recover the incompatible aid granted under the swap transactions referred to in Article 1 from the beneficiaries.
2.   By way of derogation from paragraph 1, the incompatible aid may be recovered from the beneficiaries by undoing the swap transactions, in cases where no material alterations have been made to both the publicly owned and privately owned forest land concerned by the transaction since the date of that transaction.
3.   The sums to be recovered shall bear interest from the date on which they were put at the disposal of the beneficiaries until their actual recovery.
4.   The interest shall be calculated on a compound basis in accordance with Chapter V of [Commission] Regulation (EC) No 794/2004 [of 21 April 2004 implementing Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 2004 L 140, p. 1)] and with [Commission] Regulation (EC) No 271/2008 [of 30 January 2008 amending Regulation (EC) No 794/2004 implementing Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 2008 L 82, p. 1)].
5.   The Republic of Bulgaria shall cancel all outstanding payments of aid under the swap transactions referred to in Article 1 with effect from the date of adoption of this decision.
Article 5
1.   Recovery of the aid granted under the scheme referred to in Article 1 shall be immediate and effective.
2.   The Republic of Bulgaria shall ensure that this Decision is fully implemented within 12 months following the date of notification of this Decision.
Article 6
1.   Within four months following notification of this Decision, the Republic of Bulgaria shall submit to the Commission the following information:
(a)
a list of all swap transactions, indicating the following information:
–
the administrative and market prices for the privately owned and publicly owned forest plots swapped, information on the additional cash amounts involved in each transaction, and the resulting State aid amount,
–
the name of the private party, i.e. the beneficiary of the swap transaction, involved in each transaction and an indication of the reasons why that party is or is not considered to be an undertaking.
(b)
identification of the cases in which recovery will be conducted on the basis of the market prices at the moment of the swap transactions specified in submission 2014/032997 of the Republic of Bulgaria;
(c)
identification of the cases in which recovery will be effectuated by undoing the swap transaction;
(d)
identification of the cases in which recovery will be implemented on the basis of amounts determined by an independent expert evaluator and documents demonstrating that such an independent expert, selected by public tender and agreed to by the Commission, has been appointed.
2.   Within eight months following notification of this Decision, the Republic of Bulgaria shall submit to the Commission the following information:
(a)
the list of beneficiaries that have received aid under the swap transactions referred to in Article 1 and the total amount of aid received by each of them as a result of those transactions;
(b)
the total amount (principal and recovery interests) to be recovered from each beneficiary;
(c)
a detailed description of the measures already taken and planned to comply with this Decision;
(d)
documents demonstrating that the beneficiaries have been ordered to repay the aid.
3.   Within 12 months following notification of this Decision, the Republic of Bulgaria shall submit documents demonstrating that the aid has fully been recovered from the beneficiaries concerned.
4.   The Republic of Bulgaria shall keep the Commission informed of the progress of the national measures taken to implement this Decision until the recovery of the aid granted under the swap transactions referred to in Article 1 has been completed by submitting reports on a two-monthly basis. It shall immediately submit, on simple request by the Commission, information on the measures already taken and planned to comply with this Decision. It shall also provide detailed information concerning the amounts of aid and recovery interest already recovered from the beneficiaries.’
15
In Decision 2015/456, the Commission first set out, in recitals 173 and 174, the method to be used by the Bulgarian authorities to calculate the amount of State aid to be recovered. It noted, in recital 175 of that decision, that the Bulgarian authorities already had information on the administrative prices used in the swap transactions, as well as the market prices of all the plots of land involved in those transactions at the time of the swaps, and that, consequently, those authorities should not encounter any major difficulties in determining the amounts to be recovered on the basis of the method described in recital 173.
16
In recital 176 of Decision 2015/456, the Commission stated that, in cases where the Bulgarian authorities could raise legitimate concerns that that method could not be implemented or led to an amount that did not adequately reflect the amount received by the beneficiary, the Bulgarian authorities could decide to carry out an evaluation of the market prices of the swapped plots at the time of the swap transaction with the assistance of an independent expert, who had to be qualified to carry perform such valuations and selected through a tender procedure.
17
Next, in recital 177 of Decision 2015/456, the Commission added that, since the purpose of recovery was to restore the situation prior to the swap transaction and given the exceptional nature of the agreements to swap forest land that had not been commercially exploited, the Republic of Bulgaria would comply with its obligation to recover the unlawful State aid by cancelling the contested swap transactions in cases where the state-owned and privately owned forest land had not undergone any material changes after the date of the swap transaction.
18
Finally, in recital 180 of Decision 2015/456, the Commission stated that the periods for recovering State aid from beneficiaries must, as far as possible, comply with the periods set out in the Notice from the Commission entitled ‘Towards an effective implementation of Commission decisions ordering Member States to recover unlawful and incompatible State aid’ (OJ 2007 C 272, p. 4). In any event, the periods must not exceed those set out in Table 5 of Decision 2015/456.
The pre-litigation procedure
19
At their first meeting with the Commission on 7 October 2014, the Bulgarian authorities announced their decision not to make use of the option to cancel the contested forest land swap transactions.
20
After the Bulgarian authorities indicated that they would, with the assistance of an independent expert, carry out an assessment of the market price of the forest land plots swapped at the time of the swap transaction, several tender procedures were organised between 2014 and 2017 to select that expert. On 16 October 2017, Agrolesproekt EOOD was proposed by the Bulgarian authorities for approval by the Commission. On 26 October 2017, the Commission approved the selection of Agrolesproekt. On 7 November 2017, the Bulgarian authorities and Agrolesproekt signed a contract for the provision of a service to calculate the market price of the swapped plots of forest land.
21
On 4 September 2018, the Bulgarian authorities submitted their report on the assessment of the market prices of the swapped plots of forest land to the Commission.
22
During 2020, the Commission found that Agrolesproekt was a public undertaking and that management functions were exercised by the authority that granted the State aid in question, namely the Minister for Agriculture, Food and Forestry, and considered that Agrolesproekt did not therefore meet the independence requirement.
23
By letter of 22 September 2020, the Commission invited the Bulgarian authorities to re-examine all individual valuation reports prepared by Agrolesproekt in order to determine the market prices of the swapped plots of forest land in accordance with the method described in Decision 2015/456 and to calculate without delay the correct amounts of State aid to be recovered.
24
By letter of 2 November 2020, the Bulgarian authorities informed the Commission that numerous actions had been lodged with the national courts against the recovery orders issued and that there was no procedural or legislative mechanism for reopening or closing ongoing court proceedings.
25
By letter of 11 May 2021, the Bulgarian authorities defended the choice of Agrolesproekt as an expert.
26
By letter dated 12 July 2022, the Bulgarian authorities stated that, out of a total of 102 cases in which the granting of State aid had been identified, 66 court proceedings had been initiated to date concerning the recovery of that aid and that, in 10 cases, the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria) had annulled the contested recovery orders. They specified that they had sent 21 recovery orders, of which 10 had been paid and 5 had resulted in the cancellation of the swap transaction.
27
In the context of one of the actions referred to in paragraph 24 of the present judgment, the Court was asked by the Administrativen sad – Varna (Administrative Court, Varna, Bulgaria) to give a preliminary ruling on questions concerning the interpretation of Decision 2015/456, Article 107(1) TFEU with regard to the concept of ‘undertaking’ and Article 16(3) of Regulation 2015/1589 with regard to the criteria for determining the amount of State aid received in connection with the acquisition of land in a swap, having regard to the methods for calculating the market price of plots of forest land. The Court ruled on those questions in its judgment of 19 October 2023, Ministar na zemedelieto, hranite i gorite (C‑325/22, EU:C:2023:793).
28
It is in those circumstances that the Commission has decided to bring the present action.
The action
29
In support of its action, the Commission raises three complaints. The first complaint alleges failure to implement Decision 2015/456 within the prescribed period. The second complaint alleges that the recovery of the State aid in question has been very limited. The third complaint alleges that there are no circumstances establishing that it is absolutely impossible to implement Decision 2015/456.
30
The Republic of Bulgaria requests that the action be dismissed as unfounded.
Preliminary observations
31
It should be noted that, it is clear from the case-law of the Court that the Member State to which a decision requiring recovery of unlawful aid declared incompatible with the internal market is addressed is obliged, under the fourth paragraph of Article 288 TFEU, to take all measures necessary to ensure implementation of that decision. It must succeed in actually recovering the sums owed in order to eliminate the distortion of competition caused by the anticompetitive advantage procured by that aid (judgments of 12 May 2021, Commission v Greece (Aid to agricultural producers), C‑11/20, EU:C:2021:380, paragraph 33 and the case-law cited, and of 20 January 2022, Commission v Greece (Recovery of State aid – Ferronickel), C‑51/20, EU:C:2022:36, paragraph 55 and the case-law cited).
32
Under Article 16(3) of Regulation 2015/1589, the recovery of aid declared unlawful and incompatible with the internal market by a decision of the Commission must, as is also apparent from recital 25 of that regulation, be effected without delay and in accordance with the procedures under the national law of the Member State concerned, provided that they allow the immediate and effective execution of that decision, a condition which reflects the requirements of the principle of effectiveness laid down by the case-law of the Court (judgment of 15 September 2022, Fossil (Gibraltar), C‑705/20, EU:C:2022:680, paragraph 40). To that end, the Member States concerned are to take all necessary steps which are available in their respective legal systems, including provisional measures, without prejudice to EU law (judgment of 12 May 2021, Commission v Greece (Aid to agricultural producers), C‑11/20, EU:C:2021:380, paragraph 34).
33
Consequently, late recovery, after the periods have expired, cannot satisfy the requirements of the FEU Treaty. In that regard, it is clear from settled case-law that the reference date for the application of the second subparagraph of Article 108(2) TFEU is that provided for in the decision failure to implement which is denied or, where appropriate, that subsequently fixed by the Commission (judgments of 12 February 2015, Commission v France, C‑37/14, EU:C:2015:90, paragraphs 55 and 56 and the case-law cited, and of 29 April 2021, Commission v Spain (DTT in Castilla-La Mancha), C‑704/19, EU:C:2021:342, paragraph 50).
34
Finally, according to settled case-law, except in cases where a recovery decision has been annulled pursuant to Article 263 TFEU, the only defence that may be relied on by a Member State against an action for failure to fulfil obligations brought by the Commission on the basis of Article 108(2) TFEU is the absolute impossibility of implementing correctly the decision addressed to it (judgments of 11 September 2014, Commission v Germany, C‑527/12, EU:C:2014:2193, paragraph 48 and the case-law cited, and, to that effect, judgment of 12 May 2021, Commission v Greece (Aid to agricultural producers), C‑11/20, EU:C:2021:380, paragraph 40 and the case-law cited).
35
According to case-law, the condition relating to the existence of absolute impossibility is not satisfied where the defendant Member State merely invokes legal, political or practical difficulties which it encountered in implementing the decision concerned, without taking any real steps to recover the aid from the undertakings concerned, and without proposing to the Commission any alternative arrangements for implementing the decision which could have enabled those difficulties to be overcome (judgments of 14 December 2006, Commission v Spain, C‑485/03 to C‑490/03, EU:C:2006:777, paragraph 74 and the case-law cited, and of 12 May 2021, Commission v Greece (Aid to agricultural producers), C‑11/20, EU:C:2021:380, paragraph 43 and the case-law cited).
36
In the present case, with regard to the reference date referred to in the case-law cited in paragraph 33 of the present judgment, it should be noted at the outset that it is common ground that the date set for the implementation of Decision 2015/456 was 5 September 2015 and that the Republic of Bulgaria did not ask the Commission to set an additional period for that implementation. Furthermore, as stated in paragraph 1 of the present judgment, the Commission itself limited the action for failure by the Republic of Bulgaria to fulfil its obligations under Articles 4 to 6 of Decision 2015/456 to the prescribed periods in its conclusions. Therefore, the reference date for the application of the second subparagraph of Article 108(2) TFEU is, in the present case, 5 September 2015.
37
Consequently, the argument set out in the context of the second complaint, according to which the Commission challenges, in essence, first, the independence of Agrolesproekt, selected as an independent expert on 7 November 2017, and, secondly, the application of valuation methods which, according to that institution, did not reflect the real market price, is not relevant to the examination of the present action.
38
In those circumstances, it is necessary to examine only the first and third complaints in the light of the case-law referred to in paragraphs 31 to 35 of the present judgment.
The first complaint
Arguments of the parties
39
The Commission states that, on 26 November 2014, a list of transactions meeting the conditions of Regulation No 1998/2006 was drawn up by the Republic of Bulgaria. It adds that, between 2014 and 2017, the latter organised five selection procedures for an expert responsible for determining the market price of the swapped plots of forest land and that, at the expiry of the deadline set in Decision 2015/456 for its implementation, namely 5 September 2015, the technical specifications for a third tender procedure to select an expert were still being drawn up.
40
The Commission maintains that, as at 5 September 2015, the Republic of Bulgaria had not implemented Decision 2015/456, since it had not recovered the State aid in question from its beneficiaries and had not complied with the information obligations laid down in Article 6 of that decision.
41
The Republic of Bulgaria disputes the merits of the first complaint.
42
In the first place, the Republic of Bulgaria argues that the large number of beneficiaries of the State aid in question constitutes a relevant legal and factual complexity to be taken into account in setting an appropriate and reasonable period for the implementation of Decision 2015/456. The recovery would concern State aid granted in the context of 132 forest land swap transactions, corresponding to a total of 2500 plots of land, the calculation of which would depend on a multitude of individual factors. In addition, the 12-month period for implementing Decision 2015/456 would include the period during which beneficiaries may exercise their right of appeal against recovery orders establishing a public debt. The Republic of Bulgaria emphasises that 68 court proceedings have been brought against such orders before the national courts. The exercise of the right to effective judicial protection by those beneficiaries would not be subject to the will of the Bulgarian Government. Therefore, the 12-month period laid down in Decision 2015/456 for its implementation is not reasonable.
43
In the second place, the Republic of Bulgaria submits that it took numerous measures within the prescribed period by drawing up the tender specifications for the appointment of an expert to assess the market price of the swapped forest plots. The absence of bids in response to the first call for tenders was a circumstance beyond the control of the Bulgarian Government. The subsequent tender procedure, launched in 2015, was cancelled at the request of the Commission, following a complaint lodged with its services, without that institution taking into account the fact that the complaint referred to mere estimates and not to real transaction prices.
44
Furthermore, the Republic of Bulgaria states that, within the periods set out in recital 180 of Decision 2015/456, it drew up a list of 132 forest land swap transactions carried out during the period from 1 January 2007 to 27 January 2009, identified the beneficiaries from whom State aid was to be recovered and drew up a list of beneficiaries who had received de minimis aid. It claims to have endeavoured to ensure the full and effective implementation of Decision 2015/456 by requiring that, for the tender procedures organised in 2016 and 2017 for the purpose of selecting an expert, all 132 transactions be examined and the market value of the swapped plots of forest land be determined. The Bulgarian Government reportedly selected an independent expert, examined the transactions, 103 of which were found to justify recovery, and calculated the exact amount of aid due. In 2019 and 2020, the Bulgarian Government reportedly issued 98 recovery orders to recover that aid.
45
In its reply, the Commission argues, in the first place, that since no action for annulment of Decision 2015/456 was brought under the fourth paragraph of Article 263 TFEU, the Republic of Bulgaria was required to implement that decision within the period laid down therein. That Member State had, moreover, challenged that period for the first time in its defence.
46
In the second place, the implementation of Decision 2015/456, namely the recovery of State aid, constitutes an obligation of result and not of means. Merely organising tender procedures for the purpose of selecting an expert is not sufficient to consider that that decision has been implemented. The Commission further considers that it cannot be held responsible for irregularities relating to the organisation of a tender procedure and the selection of the expert.
47
In the third place, the fact that 98 recovery orders were issued does not mean that the State aid has been recovered. In the event of proceedings before the national courts, the Bulgarian authorities, including those courts, would have to take all necessary measures provided for in their legal system, including provisional measures, to ensure the immediate and effective implementation of Decision 2015/456. The obligation to ensure the full effectiveness of that decision and to achieve a solution consistent with its purpose would require that it be ensured that the beneficiaries of that aid do not have access to it, even on a provisional basis. The fact that national court proceedings automatically suspend the effects of the contested recovery order and prevent the effective recovery of that aid would in itself constitute an infringement of EU law and, in particular, a breach of the principle of effectiveness in the implementation of Decision 2015/456.
48
In its rejoinder, the Republic of Bulgaria argues, in the first place, that it was unable to assess the reasonableness of the period set in Decision 2015/456 for its implementation before being confronted with the difficulties arising from that decision. Furthermore, from the preliminary examination stage, the Bulgarian authorities had, in accordance with the principle of sincere cooperation, informed the Commission that it was impossible to make an objective comparison with the price levels of transactions carried out on the property market.
49
In the second place, in Decision 2015/456, the Commission failed to take into account the information provided by the Bulgarian authorities on the value of the immovable property according to the relevant notarial deeds, in order to devise and propose to those authorities a means of obtaining the real market price, as referred to by that institution in that decision.
50
In the third place, the Republic of Bulgaria has taken concrete measures to ensure that beneficiaries of State aid do not have access to it, even on a temporary basis. Thus, in accordance with a moratorium adopted in 2009, they would only hold bare ownership of the forest land received from the State, without being able to build on it, which would reduce the value of that land. Those beneficiaries would themselves suffer a loss and there would therefore be no real distortion of competition. The Commission has therefore failed to demonstrate that that moratorium does not constitute an effective measure for implementing Decision 2015/456.
Findings of the Court
51
As a preliminary point, it should be noted that the reference date for the application of the second subparagraph of Article 108(2) TFEU is, in the present case, 5 September 2015.
52
It should be noted that it is undisputed that, on 17 October 2014, the Bulgarian authorities provided a list of forest land swap transactions that met the conditions for being considered ‘de minimis aid’. The Republic of Bulgaria maintains that, on 22 October 2014, the Commission informed the Bulgarian authorities that that list had been correctly drawn up, which that institution confirmed at the hearing.
53
Consequently, it must be held that the Commission considered that the forest land swap transactions included in that list must be regarded as ‘de minimis aid’ and must not be recovered by the Bulgarian authorities in the context of the implementation of Decision 2015/456.
54
In the first place, with regard to the obligation to recover the State aid provided for in Articles 4 and 5 of Decision 2015/456, it should be noted that the Republic of Bulgaria has never contested its obligation to recover that aid and that it has taken concrete steps to do so.
55
However, first, it is apparent from the submissions of the Republic of Bulgaria that the cancellations of six forest land swap transactions took place, at the earliest, during 2020.
56
Secondly, it should be noted that, in a question for written answer sent to the Bulgarian authorities by the Court, the latter were asked to specify the forest land swap transactions that gave rise to the effective recovery of the State aid granted, other than through the cancellation of the swap transaction, and for an amount agreed by the Commission. In response to that request, the Republic of Bulgaria provided a list of those transactions, which shows that the dates on which the recoveries took place are all after 5 September 2015.
57
In that regard, the Republic of Bulgaria does not claim to have actually recovered, prior to 5 September 2015, the amounts corresponding to the State aid set out in Decision 2015/456.
58
It follows that, as regards swap transactions other than those listed in paragraph 53 of the present judgment, it must be concluded that, as of 5 September 2015, as the Commission maintains, the Republic of Bulgaria had not, even partially, effectively recovered the State aid in accordance with Articles 4 and 5 of Decision 2015/456.
59
The arguments put forward by the Republic of Bulgaria cannot call that finding into question.
60
First, in so far as the Republic of Bulgaria argues that the period prescribed in Decision 2015/456 for its implementation was unreasonable, in so far as that argument amounts to an implicit plea that that decision is unlawful in the context of the present action, that argument must be rejected.
61
According to settled case-law, a Member State cannot rely on the illegality of a decision as a defence against an action for failure to fulfil obligations based on the non-implementation of that decision, except where the decision must be regarded as non-existent. It is in the context of different proceedings, namely an action for annulment under Article 263 TFEU, that any challenge to the legality of such an act of EU law must be made (see, in particular, judgment of 12 February 2015, Commission v France, C‑37/14, EU:C:2015:90, paragraph 77 and the case-law cited, and, to that effect, judgment of 29 April 2021, Commission v Spain (DTT in Castilla-La Mancha), C‑704/19, EU:C:2021:342, paragraph 69 and the case-law cited). The Republic of Bulgaria has not brought an action for annulment of Decision 2015/456 and its arguments do not contain any evidence capable of calling into question the very existence of that decision.
62
Furthermore, as noted in paragraph 36 of the present judgment, it is common ground that the Republic of Bulgaria did not request an extension of the period laid down in Decision 2015/456 for its implementation.
63
In so far as the argument of the Republic of Bulgaria set out in paragraph 60 of the present judgment must be understood as seeking to invoke an impossibility of implementing Decision 2015/456 within the prescribed period, that argument is examined in the context of the third complaint.
64
Secondly, in so far as the Republic of Bulgaria maintains that it took numerous measures within the prescribed period, namely, in essence, the drafting of tender specifications for the selection of an expert to assess the market price of the swapped plots of forest land and the launch of tender procedures, the fact that, for the tender procedures organised in 2016 and 2017, it required 132 swap transactions to be examined and the market value of the swapped plots of forest land to be determined, the fact that it calculated the exact amount of aid received and that it issued recovery orders for that aid, it should be noted that, regardless of the actual date on which those measures were taken, none of them constitutes effective recovery of the amounts of State aid in accordance with Articles 4 and 5 of Decision 2015/456, since that decision implies an obligation to achieve a specific result (see, to that effect, judgment of 14 April 2011, Commission v Poland, C‑331/09, EU:C:2011:250, paragraphs 56 and 57 and the case-law cited).
65
Thirdly, the Republic of Bulgaria’s argument that concrete measures were taken to ensure that the beneficiaries of the State aid did not receive that aid, even on a temporary basis, must be rejected, as those measures cannot be regarded as measures implementing Decision 2015/456.
66
The Republic of Bulgaria argues that, following the adoption of those measures, the beneficiaries held only the ‘bare ownership’ of the forest land received from the State, without being able to carry out any construction work on that land, which would reduce its value.
67
However, first, as is apparent from the submissions of the Republic of Bulgaria and the exchanges at the hearing, those measures predate the adoption of Decision 2015/456, since, after the Bulgarian authorities implemented a moratorium on changes in the use of swapped land in 2009, it was by means of a law adopted in 2011 that those authorities prohibited construction on that land.
68
Secondly, since the decision by the public authorities to approve a change in the use of land received from the State was considered not to constitute State aid within the meaning of Article 107(1) TFEU in Decision 2015/456, no aid is to be recovered in that regard. Furthermore, the fact that it is not possible to build on land received from the State as a result of a forest land swap does not allow the conclusion to be drawn that the economic advantage which, according to Decision 2015/456, is derived from such a swap no longer exists.
69
In the second place, with regard to the obligation laid down in Article 6 of Decision 2015/456, under which the Republic of Bulgaria was required to provide certain information within 4 months, 8 months and 12 months of the notification of that decision, that Member State maintains that, within the periods set out in recital 180 of Decision 2015/456, it drew up a list of 132 forest land swap transactions carried out during the period from 2007 to 2009, identified the beneficiaries from whom the State aid was to be recovered and drew up a list of beneficiaries who had received de minimis aid.
70
Regardless of the dates on which those measures were taken, it must be noted that their adoption does not mean that the Republic of Bulgaria has provided the information it was required to submit to the Commission in accordance with Article 6 of Decision 2015/456.
71
Those measures do not correspond to the information described in Article 6(1) to (3) of Decision 2015/456. Furthermore, as is apparent from paragraphs 54 to 68 of the present judgment, since the Republic of Bulgaria did not, within the period laid down in Decision 2015/456, proceed, even partially, with the effective recovery of the State aid, it cannot be considered that that Member State communicated to the Commission, before 5 September 2015, all the measures and information referred to in Article 6(4) of that decision.
72
In view of all the foregoing considerations, the first complaint must be upheld.
The third complaint
Arguments of the parties
73
The Commission notes that Member States must demonstrate that they have made a genuine effort to recover the State aid and to cooperate with it, in accordance with Article 4(3) TEU, in order to overcome any difficulties encountered. That is not the case here. The Commission states that, according to the information at its disposal, Decision 2015/456 had not yet been fully implemented on the date of filing of its application.
74
In the first place, the Commission argues that 66 of the 102 beneficiaries of the State aid challenged the recovery orders before the national courts, which led to further delays in the implementation of Decision 2015/456 and, where applicable, to new administrative and judicial proceedings.
75
First, the competent national authorities and national courts would be required to ensure that Decision 2015/456 is fully effective and to reach a solution consistent with the objective pursued by that decision, namely to ensure that the beneficiaries of State aid do not, even temporarily, have access to the funds corresponding to the State aid. National courts could not, therefore, apply a method of calculating the amount of that aid which would have the effect of neutralising the economic advantage identified in that decision. Furthermore, the Republic of Bulgaria does not refer to a suspension of the enforcement of an order to recover State aid based on doubts as to the validity of Decision 2015/456, whether those doubts arise from that Member State in the context of an action for annulment brought under Article 263 TFEU or from national courts.
76
Secondly, the Commission contends that, in so far as the Republic of Bulgaria considers that, under Bulgarian law, ongoing legal proceedings or decisions that have become final cannot be affected, a national court is obliged to ensure the full effect of EU law by disapplying, if necessary, any contrary provision of national law on its own initiative. Thus, the res judicata effect attached to decisions of national courts, which de facto prevent the recovery of aid, would not be a circumstance indicating an absolute impossibility of enforcing a Commission decision.
77
In the second place, the Commission emphasises that, in order to comply with the obligation to recover the State aid in question, the Member State must adopt new legal acts or set aside provisions of national law preventing it from implementing the decision ordering the recovery of aid which is unlawful and incompatible with the internal market and must quickly overcome any difficulties encountered. Thus, the additional provisions of the Law on State Property, applied by the judicial experts, should be amended or set aside in order to give full effect to Decision 2015/456, which falls entirely within the competence of the Republic of Bulgaria.
78
The Republic of Bulgaria disputes the merits of the third complaint.
79
In the first place, the Republic of Bulgaria claims that, due to the small number of transactions between private individuals, it was objectively impossible for Agrolesproekt to find comparable transactions on the market in order to establish market price assessments for the swapped forest land that would satisfy the Commission’s unsubstantiated claims regarding a ‘real market price’.
80
In the second place, the Republic of Bulgaria argues that the national courts annulled recovery orders on the basis of judicial expert reports drawn up in accordance with the national assessment criteria laid down in points 2 and 4 of paragraph 1a of the supplementary provisions of the Law on State Property. In that regard, it follows from the judgment of 19 October 2023, Ministar na zemedelieto, hranite i gorite (C‑325/22, EU:C:2023:793, paragraph 60), that points 2 and 4 of paragraph 1a are consistent with Article 107(1) TFEU and Article 16(3) of Regulation 2015/1589. Consequently, the decisions taken by the Bulgarian courts are in accordance with EU law.
81
Furthermore, in its judgments delivered on the date of the Republic of Bulgaria’s response, the Varhoven administrativen sad (Supreme Administrative Court) reportedly firmly rejected the possibility of using land for a different purpose. According to settled case-law, since absolute impossibility of implementation may be of a legal nature where it results from decisions taken by national courts, provided that those decisions are in accordance with EU law, it follows that the Republic of Bulgaria was, in the present case, faced with such impossibility.
82
In the third place, the Republic of Bulgaria claims that it submitted the issues relating to the recovery of State aid to the Commission for assessment within the prescribed period and requested instructions so that the national courts could be required to comply with them. Since the Commission did not give it those instructions, thereby failing to fulfil its obligation of sincere cooperation, the legal representatives of the Minister for Agriculture, Food and Forestry requested, in the context of the proceedings challenging the recovery orders, that a request for a preliminary ruling be made to the Court, which gave rise to the judgment of 19 October 2023, Ministar na zemedelieto, hranite i gorite (C‑325/22, EU:C:2023:793), which gave the Bulgarian authorities new opportunities to take follow-up measures to overcome the difficulties associated with the implementation of Decision 2015/456.
83
In the fourth place, the Republic of Bulgaria notes that the Commission did not indicate, either in Decision 2015/456 or at any subsequent stage, any specific method for assessing the market prices of the forest land swapped. Furthermore, with regard to the Commission’s allegations concerning the unreliability of the valuations carried out, that institution did not indicate, either in its application or in the annexes thereto, a precise or approximate figure for the ‘real market price’.
84
In its reply, the Commission notes, in the first place, that it does not follow from the judgment of 19 October 2023, Ministar na zemedelieto, hranite i gorite (C‑325/22, EU:C:2023:793), that national courts calculate the amount of State aid in a manner that leads to the implementation of Decision 2015/456, nor that the method derived from the Law on State Property results in a correct calculation of the real market price. It notes that the Court found that the national court must take into account, first, the undervaluation of the prices referred to in the notarial deeds and, secondly, the insufficient number of sales that could be taken into account by analogy to allow for a reliable comparison. It appears from a judgment of the Varhoven administrativen sad (Supreme Administrative Court) of 20 April 2021 that those two factors were not taken into account when applying the method derived from the Law on State Property.
85
Furthermore, it is clear that the decisions of the national courts are not in conformity with EU law, given that the judicial experts, calculating the market prices of the forest land swapped on the basis, inter alia, of the data contained in the notarial deeds, would have neutralised the recovery of State aid in 58 cases.
86
In the second place, the Commission disputes that it must find a solution to the alleged legal impossibility of recovering unlawful State aid under domestic law. It emphasises that the concept of ‘absolute legal impossibility’ is strictly defined so as not to undermine the primacy and effectiveness of EU law, and cannot be based on the existence of a national legal framework that prevents effective recovery. It further considers that recitals 172 to 179 of Decision 2015/456 give the Republic of Bulgaria several options for dealing with the complexity of recovering State aid.
87
In the third place, the Commission notes that, on the date of filing of the reply, the Republic of Bulgaria had provided data only for the amounts of State aid calculated in the context of the ongoing national court proceedings. By contrast, it was not aware of the final data relating to the calculation of the amounts to be recovered.
88
In its rejoinder, the Republic of Bulgaria maintains that it amended the provisions of Article 6 of the Naredba za otsenka na pozemleni imoti v gorski teritorii (Regulation on the valuation of land in forest areas, DV No 63 of 16 August 2011), as amended and supplemented (DV No 34 of 3 May 2016), in order to implement Decision 2015/456. The market prices of the swapped forest land determined in Agrolesproekt’s valuation reports were allegedly obtained thanks to that amendment and despite the insufficient number of similar transactions on the market.
89
There is also an objective impossibility of a legal nature arising from the application by the national courts of points 2 and 4 of paragraph 1a of the supplementary provisions of the Law on State Property, which is in line with the judgment of 19 October 2023, Ministar na zemedelieto, hranite i gorite (C‑325/22, EU:C:2023:793). The criteria set out in those provisions require experts to examine similar transactions on the market on the basis of the notarial deeds relating to those transactions, which are considered to be actual sales of property with similar characteristics.
Findings of the Court
90
It should be noted, in the first place, that in so far as the Republic of Bulgaria argues that the Commission did not indicate in Decision 2015/456 or at a later stage either a specific method for assessing the market prices of the forest land swapped or a precise or approximate figure for the ‘real market price’, in reality, the Commission indicated three methods which the Republic of Bulgaria could use in order to implement Decision 2015/456, set out in recitals 173 to 177 thereof.
91
One method, referred to in recital 177 of Decision 2015/456, provides for the cancellation of the forest land swap transaction. The other two methods, set out in recitals 173 to 176 of that decision, relate to determining the amount of State aid to be recovered on the basis of either the market prices prevailing at the time of the swap transactions, as indicated in Notice 2014/032997 submitted by the Republic of Bulgaria, or the amount set by an independent expert following an assessment of the market price of those plots.
92
In those circumstances, the Commission, which was not required to quantify the aid to be recovered, was not, contrary to the Republic of Bulgaria’s contention, required to define, in Decision 2015/456 or at a later stage, either more specific criteria for assessing the market prices of the swapped forest land or a precise or approximate numerical value for the ‘real market price’.
93
In the second place, since the Republic of Bulgaria argues that Agrolesproekt faced an objective impossibility, namely that of finding comparable transactions on the market in order to assess the market prices of the land swapped, it should be emphasised, first, that the possibility of using an expert to assess those prices, as provided for in recital 176 of Decision 2015/456, was not the only possible method of assessing the amount of State aid to be recovered, as was pointed out in paragraph 91 of the present judgment, and, secondly, that, in so far as the assessment carried out by that expert was in accordance with that decision, that assessment did not have to be based on the other method referred to in that paragraph. Thus, although the Commission approved the selection of Agrolesproekt, the decision to use an expert to assess those prices was not imposed by Decision 2015/456, but resulted from a decision by the Bulgarian authorities.
94
In that regard, it should be noted that, as the Advocate General pointed out in points 64, 89 and 90 of his Opinion, the expert could be a public undertaking and, as EU law and the Commission’s decision-making practice stand, the Republic of Bulgaria had no reason to disclose to the Commission the information that Agrolesproekt was a public undertaking controlled, in particular, by the Ministry of Agriculture, Food and Forestry.
95
Furthermore, the difficulties cited by the Republic of Bulgaria in finding comparable transactions on the market in order to assess the market prices of the land swapped are of a practical nature and were known to that Member State, since it had informed the Commission of them during the administrative procedure, as stated in Decision 2015/456. In accordance with the case-law referred to in paragraph 35 of the present judgment, such difficulties do not allow the condition relating to the existence of an absolute impossibility of implementing Decision 2015/456 to be considered to be fulfilled in the present case.
96
In the third place, in so far as the Republic of Bulgaria relies on the existence of appeals before the national courts against the recovery orders issued, it should be noted that that Member State does not claim that measures have been taken, in the context of those proceedings, to ensure that the beneficiaries do not enjoy the aid in question, even on a provisional basis. Furthermore, the Republic of Bulgaria does not argue that the validity of Decision 2015/256 has been challenged in the context of such appeals.
97
Therefore, in accordance with the case-law referred to in paragraph 35 of the present judgment, those legal difficulties do not allow the conclusion to be drawn that, in the present case, the condition relating to the existence of an absolute impossibility of implementing Decision 2015/456 is satisfied.
98
In the fourth place, in so far as the Republic of Bulgaria relies on the absolute impossibility, of a legal nature, of implementing Decision 2015/456, which stems from decisions taken by national courts in accordance with EU law, having regard to the terms of the judgment of 19 October 2023, Ministar na zemedelieto, hranite i gorite (C‑325/22, EU:C:2023:793), that argument must be rejected.
99
In that regard, the Court held that Article 107(1) TFEU and Article 16(3) of Regulation 2015/1589 do not preclude, a priori, criteria such as those laid down in points 2 and 4 of paragraph 1a of the supplementary provisions of the Law on State Property, for determining the amount of State aid received on the acquisition of land, in the context of a forest land swap, which are based on the average prices of registered property transactions relating to land with similar characteristics to that being valued and located close to it, in which at least one of the parties is a merchant, concluded within a period of 12 months prior to the valuation (see, to that effect, judgment of 19 October 2023, Ministar na zemedelieto, hranite i gorite, C‑325/22, EU:C:2023:793, paragraphs 56 and 60).
100
The Court added, however, that the application of such criteria must be compatible with the Commission’s decision on the recovery of State aid and that they must enable the market value of that land at the time of the swap to be determined. In that regard, as the Republic of Bulgaria notes, the Court specified that it was for the national court, which had made the request for a preliminary ruling, to verify whether it was true that the prices of property transactions were, in practice, undervalued in order to reduce the amount of tax and notary fees, and whether, as the Bulgarian Government had stated in its written observations, the sales that could be taken into account by analogy were insufficient to allow a reliable comparison (see, to that effect, judgment of 19 October 2023, Ministar na zemedelieto, hranite i gorite, C‑325/22, EU:C:2023:793, paragraphs 56, 58 and 60).
101
The difficulties cited by the Republic of Bulgaria, arising essentially from the need to apply points 2 and 4 of paragraph 1a of the supplementary provisions of the Law on State Property, when it would be difficult to find comparable transactions on the market in order to establish market price valuations for the swapped land, are legal and practical difficulties. First, as already noted in paragraph 93 of the present judgment, those difficulties arise from the choice made by the Bulgarian authorities to use a method of calculating the amount of aid to be recovered based on the determination by an expert of the market price of the land concerned. Secondly, in so far as the application of points 2 and 4 of paragraph 1a of the supplementary provisions of the Law on State Property impeded the implementation of Decision 2015/456, it was for the Bulgarian authorities to take all necessary measures to avoid such difficulties in implementation and thus ensure the full effect of that decision.
102
As the Court pointed out in its judgment of 19 October 2023, Ministar na zemedelieto, hranite i gorite (C‑325/22, EU:C:2023:793, paragraph 55 and the case-law cited), if a valuation method produces a result that deviates from the market value, the national court is required to disregard it by virtue of the obligation incumbent on all State bodies, including national courts, to set aside any rule of national law that is contrary to EU law.
103
In that regard, it should be noted that it is for the Commission to demonstrate, by means of concrete and specific evidence, that the market price established by the Bulgarian authorities does not allow for the recovery of State aid in the context of the implementation of Decision 2015/456.
104
In the fifth place, in so far as the Republic of Bulgaria argues that the period set in Decision 2015/456 for its implementation was unreasonable and in so far as that argument must be understood as seeking to establish that it was impossible to implement Decision 2015/456 within the period prescribed, as stated in paragraph 63 of the present judgment, that argument must be rejected. As noted in paragraph 36 of the present judgment, the Republic of Bulgaria did not ask the Commission to set an additional period for that implementation.
105
It must therefore be concluded that the delay in implementing Decision 2015/456 is unjustified and that the third complaint must be upheld.
106
It follows from the foregoing considerations that, since the first and third complaints must be upheld, it must be held that, by failing to take, within the prescribed periods, all the measures necessary to implement Decision 2015/456, the Republic of Bulgaria has failed to fulfil its obligations under Articles 4 to 6 of that decision and under the FEU Treaty.
Costs
107
Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission applied for costs, the Republic of Bulgaria, which has been unsuccessful, must be ordered to pay the costs.
On those grounds, the Court (Eighth Chamber) hereby:
1.
Declares that, by failing to take, within the prescribed periods, all the measures necessary to implement Commission Decision (EU) 2015/456 of 5 September 2014 on the aid scheme No SA.26212 (11/C) (ex 11/NN – ex CP 176/A/08) and SA.26217 (11/C) (ex 11/NN – ex CP 176/B/08) implemented by the Republic of Bulgaria in the context of swaps of forest land, the Republic of Bulgaria has failed to fulfil its obligations under Articles 4 to 6 of that decision and under the FEU Treaty;
2.
Orders the Republic of Bulgaria to pay the costs.
[Signatures]
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*1
)	Language of the case: Bulgarian.