61998CJ0413_EN
Parties
Grounds
Decision on costs
Operative part
Parties
In Case C-413/98,
REFERENCE to the Court under Article 177 of the EC Treaty (now Article 234 EC) by the Supremo Tribunal Administrativo (Portugal) for a preliminary ruling in the proceedings pending before that court between
Directora-Geral do Departamento para os Assuntos do Fundo Social Europeu (DAFSE)
and
Frota Azul-Transportes e Turismo Ld.a,
on the interpretation of Council Decision 83/516/EEC of 17 October 1983 on the tasks of the European Social Fund (OJ 1983 L 289, p. 38), Council Regulation (EEC) No 2950/83 of 17 October 1983 on the implementation of Decision 83/516 (OJ 1983 L 289, p. 1) and Commission Decision 83/673/EEC of 22 December 1983 on the management of the European Social Fund (OJ 1983 L 377, p. 1),
THE COURT (Sixth Chamber),
composed of: C. Gulmann, President of the Chamber, V. Skouris, J.-P. Puissochet, R. Schintgen and F. Macken (Rapporteur), Judges,
Advocate General: J. Mischo,
Registrar: R. Grass,
after considering the written observations submitted on behalf of:
the Portuguese Government, by L. I. Fernandes and L. Claudino de Oliveira, acting as Agents,
Commission of the European Communities, by T. Figueira and K. Simonsson, acting as Agents,
having regard to the report of the Judge-Rapporteur,
after hearing the Opinion of the Advocate General at the sitting on 13 July 2000,
gives the following
Judgment
Grounds
1 By order of 27 October 1998 received at the Court on 20 November 1998, the Supremo Tribunal Administrativo (Supreme Administrative Court) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) seven questions on the interpretation of Council Decision 83/516/EEC of 17 October 1983 on the tasks of the European Social Fund (OJ 1983 L 289, p. 38), Council Regulation (EEC) No 2950/83 of 17 October 1983 on the implementation of Decision 83/516 (OJ 1983 L 289, p. 1) and Commission Decision 83/673/EEC of 22 December 1983 on the management of the European Social Fund (OJ 1983 L 377, p. 1).
2 Those questions were raised in proceedings between Frota Azul-Transportes e Turismo Ld.ª (Frota Azul) and the Directora-Geral do Departamento para os Asuntos do Fundo Social Europeu (Director-General of the Department of European Social Fund Affairs, hereinafter DAFSE) concerning DAFSE's refusal to certify certain expenditure incurred by Frota Azul and its consequent decision requiring Frota Azul to repay sums received by way of assistance from the European Social Fund (ESF) and from the national Social Security budget.
Community legislation
3 Article 2 of Decision 83/516 provides:
1. Fund assistance shall be given for operations carried out both by bodies governed by public law and bodies governed by private law.
2. The relevant Member States shall guarantee the successful completion of the operations. However, this provision shall not apply to operations for which Fund assistance covers all eligible expenditure.
4 Article 5 of Decision 83/516 provides as follows:
1. Without prejudice to the following paragraphs, Fund assistance shall be granted at the rate of 50% of eligible expenditure without, however, exceeding the amount of the financial contribution of the public authorities of the Member State concerned.
2. In the case of operations to further employment in regions where there is an especially serious and prolonged imbalance in employment, such regions to be defined by the Council acting by a qualified majority on a proposal from the Commission, Fund assistance shall be increased by 10%.
...
5. Fund assistance may not result in over-financing of eligible expenditure.
5 Under Article 1 of Regulation No 2950/83 ESF assistance may be granted only for expenditure intended to cover inter alia incomes of persons undergoing vocational training and the costs of the preparation, operation and administration of vocational training measures.
6 Article 5(4) of the regulation provides:
Final payment claims shall contain a detailed report on the content, results and financial aspects of the relevant operation. The Member State shall certify the accuracy of the facts and accounts in payment claims.
7 Article 6 of Regulation No 2950/83 provides:
1. When Fund assistance is not used in conformity with the conditions set out in the decision of approval, the Commission may suspend, reduce or withdraw the aid after having given the relevant Member State an opportunity to comment.
2. Sums paid which are not used in accordance with the conditions laid down in the decision of approval shall be refunded. The Member State concerned should have secondary liability for the repayment of sums, unwarranted payment of which was made for operations to which the guarantee referred to in Article 2(2) of Decision 83/516/EEC applies. To the extent that a Member State repays to the Community sums owed by the bodies financially responsible for an operation, the Community's rights in the matter are transferred to the Member State.
8 Article 7 of the regulation provides:
1. Without prejudice to any controls carried out by the Member States the Commission may make on-the-spot checks.
2. Checks on the content of a payment claim may be made by representative sampling. Before making a check, the Commission shall determine the sample size in advance, in cooperation with the Member State concerned, with reference to the physical and technical aspects of the operation concerned. To the extent that the sample check leads to a reduction, this shall be applied proportionally to the whole of the amount claimed, once the Member State has had an opportunity to submit its comments.
3. The Member State shall ensure that the Commission has access to the information necessary to enable it to appraise both the aims and content of applications and of claims, and the progress, financing and results of operations. Member States shall make available to the Commission the material justifying the certification specified in Article 5(2) and (4).
4. The relevant Member State shall provide the Commission with any assistance necessary to carry out checks. The Commission shall give the Member State due notice of checks. Representatives of the Member State may participate in such checks.
5. At the request of the Commission and with the agreement of the relevant Member State, checks may be carried out by the competent authorities of that State. Representatives of the Commission may participate in such checks.
9 Decision 83/673, which concerns the management of the ESF, provides in the first indented paragraph of Article 1(2) that applications for final payment under Article 5(4) of Regulation No 2950/83 are to be submitted on the form set out in Annex 2 to the decision.
10 Article 6 of Decision 83/673 provides:
1. Member States' payment applications must reach the Commission within 10 months of the date of completion of the operations concerned. No payment shall be made in respect of aid for which the application is submitted after the expiry of this period.
2. Advances must be reimbursed when the costs of the operation concerned cannot be justified on the form given in Annex 2 within three months of the expiry of the 10-month period laid down in paragraph 1.
11 Finally, Article 7 of Decision 83/673 provides:
Where the management of an operation for which assistance has been granted is the subject of an investigation because of suspected irregularities, the Member State shall notify the Commission thereof without delay.
The main proceedings and the questions referred for a preliminary ruling
12 Frota Azul, together with other undertakings, applied in 1987 for financial assistance from the ESF and the national Social Security budget in order to carry out vocational training operations in 1988.
13 When Frota Azul had completed the operations in respect of which it had previously obtained approval, it made a final payment claim in respect of the balance of national and Community assistance.
14 The Director General of DAFSE, which acts for the Portuguese Republic in matters relating to the ESF, certified the expenditure submitted and forwarded the claim to the ESF in 1989.
15 However, owing to the fact that DAFSE had to adjudicate upon a high number of claims for assistance from the ESF to finance operations undertaken by public and private operators, it was not until 1995 that, having undertaken a reassessment of the case, DAFSE stated that the amounts which it would thereafter be able to certify were lower than those previously notified to the Commission.
16 On completion of its reassessment, DAFSE refused to certify certain expenditure and decided, without prejudice to any final decision which the Commission might adopt with regard to the final payment claim, that Frota Azul should repay the sum of PTE 3 777 465 representing the adjusted balance of ESF aid and aid from the national Social Security budget.
17 Frota Azul appealed against that decision to the Tribunal Administrativo de Círculo de Lisboa (Administrative Circuit Court, Lisbon, Portugal), which annulled it.
18 That court found that DAFSE's act of certifying the accuracy of the facts and accounts was merely a technical check preparatory to the final decision, which was a matter solely for the Commission, and consequently that DAFSE, in holding certain sums to be ineligible having taken account of criteria of reasonableness and sound financial management, had acted ultra vires.
19 DAFSE brought an appeal against that judgment before the Supremo Tribunal Administrativo, which decided to stay proceedings and refer the following questions to the Court of Justice for a preliminary ruling:
1. Under Council Regulation No 2950/83, must a decision by a Member State not to certify the accuracy of the facts and accounts concerning the portion of the expenditure in respect of a training operation to which the European Social Fund (ESF) has contributed, on the ground that: it does not correspond to the actual cost of the goods and services on the domestic market; the prices of services exceed the maximum prices laid down in the Member State; the administrative costs charged are excessive; the quantities and types of materials used bear no relation to the operation or the quantities are not justified by that specific operation; or on similar grounds, be deemed to be a decision that the expenditure is ineligible, or is it, on the contrary, a decision which falls within the scope of negative certification of the accuracy of the facts and accounts in payment claims, pursuant to the second part of Article 5(4) of that regulation?
2. Does the reduction of the national contribution, decided upon by the competent national body when clearing and paying the final balance, as a result of non-certification of a part of certain expenditure on the grounds set out in the preceding question, entail, pursuant to the combined provisions of Article 5(4), the first part of Article 7(1) of the regulation and Article 5(1) and (5) of Decision 83/516/EEC, a corresponding proportional reduction in the amount of Community assistance, so that any reassessment by the Community authorities of the correctness or accuracy of the facts and accounts in respect of such expenditure, such as to enable the ESF none the less to make its full contribution, serves no purpose and is not viable?
3. Likewise, where, having found serious irregularities vitiating the entire framework within which the financing was assessed and granted, a Member State decides, after receiving a claim for final payment of the balance pursuant to Article 5(4) of the regulation, to withdraw national assistance, despite the fact that some kind of training course was organised, or where the course was only a sham, does the body managing the ESF cease to have any discretion, and is there no justification for it to take a final decision, by virtue of the fact that any possibility of a Community contribution towards that course is irretrievably precluded, and that the "withdrawal of assistance" has even at Community level already taken effect in law, simply because the national body has taken a decision to that effect and because that preclusion follows necessarily and automatically, being contained in the abovementioned articles of the regulation and the decision, as well as in the rules set out in general terms in the aforementioned provisions of Community law, inasmuch as they govern "participation in financing" and "contribution by the Fund" since, in the circumstances set forth above, situations of that kind would no longer arise?
4. Must certification "of the accuracy of the facts and accounts in payment claims" be understood as excluding any assessment whatever as to whether the expenditure is justified by the operation actually carried out, the cost of goods and services on the domestic market, and the reasonableness of the costs charged within a complex structure, and therefore as requiring such assessment to be restricted to a formal verification that the expenditure submitted refers to approved expenditure, that the expenditure has remained within the overall ceilings of each item and that it is accounted for by formally acceptable documents in accordance with the applicable accounting rules?
5. Is the application to the expenditure incurred of substantive assessment criteria, namely, whether such expenditure corresponds to actual market prices, whether the administrative costs of the undertaking which carried out the training course have been properly charged, whether the use of a certain quantity or even a certain type of materials is unreasonable (e.g. materials more costly than others equally suitable) with a view to organising a specific training course, capable of reserving a power of assessment to Community bodies, with the result that those criteria must be identical and thus all traders within the Community be accorded equal treatment, with the implications which that entails for the interpretation and application of Article 5(4) of Regulation No 2950/83?
6. Does the power reserved to the Commission, to the exclusion of other bodies, to suspend, reduce or withdraw the Fund's assistance, laid down in Article 6(1) of the regulation, extend to the suspension, reduction or withdrawal of the "national contribution" by the national body which manages aid for training purposes?
Accordingly, if the competent national body is not precluded by Community law from suspending, reducing or withdrawing the national assistance, does the adoption of a decision of that kind after submission of the claim for final payment take immediate and automatic effect in respect of the corresponding proportion of the Community contribution and, in addition, does it allow the national body to demand the immediate repayment of the national contribution, or of the national contribution and the Community contribution?
Or else, is it an absolute requirement of Community law that the national body must restrict itself to not certifying certain expenditure and await a final decision from the Commission and can only then demand repayment of any amount advanced on account of final payment for the operation, since it is only then, on fulfilment of the precondition of the passing of time, that it is lawfully vested with power to make decisions regarding the recovery or repayment of sums paid or granted but not due?
7. May certification of the accuracy of the facts and accounts in claims for final payment in respect of training courses, as referred to in the second part of Article 5(4) of Council Regulation No 2950/83, be validly effected only by means of an entry in box 18 of the form set out in Annex II to Commission Decision 83/673 of 22 December 1983 when the claim for final payment is forwarded, pursuant to the first indent of Article 1(2) and Article 1(3) and (4) as well as Article 6(1) and (2) of the abovementioned decision, or do those provisions apply only to inter-departmental procedural formalities, of no external relevance since they are not essential, which do not make it impossible for the department concerned subsequently to issue a certificate which differs from the first certificate, either as a separate document or on a fresh form, provided that, in either case, it takes account of the legal nature of the measures in question and complies with the limits and conditions laid down by national law for making the relevant alteration?
The fourth and fifth questions
20 By its fourth and fifth questions, which it is appropriate to consider first, the national court is essentially asking whether the relevant Member State's certification of the accuracy of the facts and accounts in final payment claims must, for the purposes of Article 5(4) of Regulation No 2950/83, be understood as including an assessment as to whether the expenditure incurred is appropriate and can be justified.
21 The Portuguese Government contends that certification cannot amount merely to checking accounts but, on the contrary, entails making a judgment as to whether or not the items of expenditure set out in the claim for payment are eligible, in order that the Commission may be given an assurance that the various items in the claim are genuine and lawful and thus that the costs certified represent the actual costs of the operation undertaken.
22 The Commission concurs with that analysis and observes that beneficiaries of ESF assistance must sign a document of acceptance whereby they undertake to use the aid in conformity with national and Community law, taking account of the factors which proved decisive when the decision approving their application was adopted.
23 The Commission nevertheless makes it clear that a decision taken by the national authorities as to certification is not binding on it and is without prejudice to its final decision.
24 In that regard, it should be pointed out that, on account of their closeness to the economic operators who benefit from financial assistance, the competent authorities in the Member States must implement aid programmes under the Commission's direction.
25 In that respect, it should be borne in mind at the outset that Article 5(4) of Regulation No 2950/83 provides that final payment claims are to contain a detailed report on the content, results and financial aspects of the relevant operation. Next, under Article 2(2) of Decision 83/516, the Member States concerned are to guarantee the successful completion of the operations. Finally, under Article 7(1) of Regulation No 2950/83 both the Member States and the Commission may check the use to which the financial assistance is being put.
26 Furthermore, Article 2 of the Financial Regulation of 21 December 1977 applicable to the general budget of the European Communities (OJ 1977 L 356, p. 1) states that, [t]he budget appropriations shall be used in accordance with the principles of economy and sound financial management.
27 It follows that, given the system for monitoring the allocation of Community public funds, a Member State cannot, when undertaking the certification of the accounts submitted to it by the recipient of financial assistance from the ESF, confine itself to carrying out a mere technical check of the expenditure incurred but must, to the contrary, ensure that the expenditure corresponds to the operation actually undertaken and to the price of goods and services on the domestic market and satisfy itself as to the reasonableness of the costs charged within a complex structure. It must therefore satisfy itself, first, that the expenditure incurred by the recipient of the aid is reasonable and, second, that that person has displayed sound financial management.
28 That interpretation is, moreover, borne out by Article 7(2) of Regulation No 2950/83, according to which checks may be made by representative sampling. If the certification carried out by the Member State concerned amounted to no more than a technical check, the Commission would then be obliged to carry out systematic monitoring.
29 Since, as the Court has found, certification of the facts and accounts must also include an assessment by the Member State concerned as to whether the expenditure was appropriate and justified, the national court raises the question whether in such circumstances there is a risk, as between the Member States, of the assessment criteria not being applied uniformly to economic operators.
30 In that regard, it is sufficient to observe, as the Court did in its judgment in Case C-32/95 P Commission v Listeral and Others [1996] ECR I-5373, paragraph 29, that, although a decision to suspend, reduce or withdraw Community assistance may sometimes reflect an assessment and evaluation by the competent national authorities, under Article 6(1) of Regulation No 2950/83, it is the Commission which adopts the final decision and it alone assumes responsibility in law vis-à-vis the beneficiaries.
31 Therefore, since the final decision concerning the grant of Community assistance lies exclusively with the Commission, which applies the same criteria to economic operators from the various Member States, the risk of their being treated differently is removed.
32 The answer to the fourth and fifth questions must therefore be that the relevant Member State's certification of the accuracy of the facts and accounts in final payment claims must, for the purposes of Article 5(4) of Regulation No 2950/83, be understood as including an assessment as to whether the expenditure incurred is appropriate and justified.
The first question
33 By its first question, which it is appropriate to consider in second place, the national court is essentially asking whether the decision of the competent authorities of a Member State not to certify the accuracy of the facts and accounts concerning a part of the expenditure in respect of a training operation to which the ESF has contributed, on the ground that it cannot be justified or is disproportionate, must be deemed to be a decision as to the ineligibility of the expenditure.
34 According to the Portuguese Government, since Article 5(4) of Regulation No 2950/83 uses the term certify, the Member State must not confine itself to expressing an opinion. DAFSE's refusal to certify a part of the expenditure constitutes a decision that that part is ineligible and the result is that the Commission can no longer entertain questions as to the eligibility of non-certified expenditure but must confine itself to checking expenditure approved by DAFSE.
35 First, it is necessary to ascertain what is covered by the concept of ineligible expenditure.
36 As the Commission and the Portuguese Government have rightly pointed out, it is clear from Regulation No 2950/83 that it is not only expenditure which cannot, under Article 1 of the regulation, be financed by the ESF which must be classified as ineligible, but also expenditure which, although eligible under that provision, cannot, under Article 6 of the regulation, be taken into account in the final settlement on the ground that the ESF assistance has not been used in conformity with the conditions set out in the decision of approval.
37 Therefore, expenditure which was not accepted on the ground that the financial assistance was not used in accordance with the conditions set out in the decision of approval must be held to be ineligible.
38 However, contrary to the Portuguese Government's assertion, the Commission alone, as has been noted in paragraph 30 of the present judgment, is competent to suspend, reduce or withdraw Community aid from the ESF.
39 In those circumstances, expenditure which has been declared ineligible by the competent authorities of the Member State concerned will become irreversibly ineligible only if the Commission adopts a decision to that effect. At the time when the Commission carries out its check, the Member State concerned must, in particular under Article 7(4) of Regulation No 2950/83, provide the Commission with the assistance that is necessary, which means that the Commission may ask the Member State to provide it with explanations as to why it has refused to certify certain expenditure.
40 The answer to the first question must therefore be that a decision by the competent authorities of a Member State not to certify the accuracy of the facts and accounts concerning a portion of the expenditure in respect of a training operation to which the ESF has contributed, on the ground that the expenditure cannot be justified or is disproportionate, must be regarded as a proposal, addressed to the Commission, for that portion of the expenditure to be held to be ineligible.
The second and third questions and the first part of the sixth question
41 By its second and third questions, and by the first part of its sixth question, all of which it is appropriate to consider in third place, the national court is essentially asking (i) whether, where the competent authorities of a Member State decide to reduce or withdraw the national contribution following a decision not to certify the accuracy of the facts and accounts concerning certain expenditure, that entails a corresponding proportional reduction or, as the case may be, the withdrawal of Community assistance and (ii) whether the Commission's decision to suspend or reduce Community assistance extends to the national contribution.
42 The Portuguese Government contends that, although the ultimate decision on a final payment claim is within the Commission's competence, that decision is dependent on the prior certification by the Member State concerned of the expenditure submitted by the recipient of financial assistance. That Member State's refusal to certify certain expenditure, and thus its refusal to allocate a portion of the national contribution, precludes corresponding ESF financing. Since the Member State alone has power to grant a national contribution, the Commission is not entitled to go back on that decision and impose a financial charge to the detriment of the national budget.
43 That argument cannot be accepted.
44 The Court held in its order in Case C-453/98 P Branco v Commission [1999] ECR I-8037, paragraph 88, that, under Article 6(1) of Regulation No 2950/83, it is the Commission which adopts the final decision and assumes sole legal responsibility for such a decision vis-à-vis the beneficiaries. From this, the Court concluded that DAFSE's certification was not an act which was binding on the Commission.
45 Thus, as the Commission has rightly pointed out, the national authorities responsible for ESF assistance put forward a proposal to reduce or withdraw funding, which relates to the national contribution and consequently, pursuant to Article 5(1) of Decision 83/516, to Community assistance, a proposal which must be made the subject of a final decision by the Commission, which concerns only ESF assistance.
46 Consequently, the amount to be paid from the national contribution is determined by the Commission's final decision approving payment.
47 That interpretation is borne out by, first, the last sentence of Article 7(2) of Regulation No 2950/83, according to which a reduction imposed by the Commission as the result of a check is to be applied proportionally to the whole of the amount claimed, and, second, by Article 5(5) of Decision 83/516, according to which ESF assistance may not result in over-financing of eligible expenditure.
48 The answer to the second and third questions and to the first part of the sixth question must therefore be that the reduction or withdrawal of the national contribution proposed by the competent authorities of a Member State pursuant to a decision not to certify the accuracy of the facts or accounts as regards certain expenditure must be made the subject of a final decision by the Commission concerning the portion of the aid corresponding to the assistance from the ESF. That final decision of the Commission approving the balance to be paid determines the amount of the balance to be paid from the national contribution.
The second part of the sixth question
49 By the second part of its sixth question, the national court is essentially asking whether Community law precludes the competent authorities of a Member State from requiring, as a protective measure, repayment of the national contribution and of the assistance from the ESF before the adoption by the Commission of its final decision.
50 The Portuguese Government submits that, since the Member State has secondary liability under Article 6(2) of Regulation No 2950/83 for sums unjustifiably received by the beneficiary, it may order repayment of those sums following a decision refusing certification or following the Commission's final decision.
51 The Commission submits that it is only once its final decision has been taken that the competent national authorities may make a definitive claim for repayment of sums unjustifiably received by the beneficiary. However, prior to the adoption of the final decision, Community law does not preclude such repayment for protective reasons. Such a question is a matter exclusively for the domestic law of each Member State.
52 The second interpretation must be upheld.
53 As has been pointed out in paragraph 44 of this judgment, the decision to suspend, remove or withdraw ESF assistance is exclusively a matter for the Commission.
54 No provision of Community law precludes the competent national authorities from requiring repayment of a part or whole of the financial assistance granted, where repayment constitutes a purely protective measure.
55 On the contrary, since under Article 6(2) of Regulation No 2950/83 the Member State has secondary liability for the repayment of sums unjustifiably received by the beneficiary, the Member State may have a legitimate interest, in particular where there is a risk of the beneficiary's insolvency, in requiring repayment of the sums, as a protective measure, in order to avoid the possibility of having to bear the burden of such repayment following the Commission's final decision.
56 In those circumstances, whether the competent national authorities may claim, as a purely protective measure, the repayment of sums which they regard as unjustifiably received by the beneficiary is a question of national law.
57 The answer to the second part of the sixth question must therefore be that Community law does not preclude the competent authorities of a Member State from requiring, as a purely protective measure, repayment of the national contribution and of the ESF assistance before the adoption by the Commission of its final decision.
The seventh question
58 By its seventh question, the national court is essentially asking whether certification, for the purposes of the second sentence of Article 5(4) of Regulation No 2950/83, of the accuracy of the facts and accounts in the final payment claim in respect of a training course prohibits a Member State from carrying out a subsequent reassessment of the final payment claim.
59 It should be observed in that regard that Article 6 of Decision 83/673 provides that payment applications must reach the Commission within 10 months of the date of completion of the training operation and that no payment may be made in respect of aid for which the application is submitted after the expiry of that period. If checks to establish conformity could be carried out only before certification of the accuracy of the facts and accounts in a payment claim, the Member State might not be in a position to submit its application to the Commission within the 10-month period, with the result that the final payment of the aid could not be made. Thus, forwarding the certification of the accuracy of the facts and accounts in a final payment claim to the Commission before the check to establish conformity is carried out or before the check is completed may be in the interests of the recipient of the aid (see the order in Branco v Commission, paragraph 77).
60 In those circumstances, nothing precludes the competent national authorities from checking, after the date of certification of the accuracy of the facts and accounts in a final payment claim, the accuracy of the information in the claim (see, to that effect, the order in Branco v Commission, paragraph 78).
61 When they carry out such checks, the competent national authorities are not in any way undertaking a second certification, within the meaning of the second sentence of Article 5(4) of Regulation No 2950/83, in respect of the facts and accounts but are exercising their powers under Article 7 of Decision 83/673.
62 The answer to the seventh question must therefore be that certification, for the purposes of the second sentence of Article 5(4) of Regulation No 2950/83, of the accuracy of the facts and accounts in the final payment claim in respect of a training operation does not preclude a Member State from undertaking a subsequent reassessment of the final payment claim and from submitting to the Commission, if necessary, a revised application proposing that the assistance be reduced.
Decision on costs
Costs
63 The costs incurred by the Portuguese Government and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.
Operative part
On those grounds,
THE COURT (Sixth Chamber),
in answer to the questions referred to it by the Supremo Tribunal Administrativo by order of 27 October 1998, hereby rules:
1. The relevant Member State's certification of the accuracy of the facts and accounts in final payment claims must, for the purposes of Article 5(4) of Council Regulation (EEC) No 2950/83 of 17 October 1983 on the implementation of Decision 83/516/EEC on the tasks of the European Social Fund, be understood as including an assessment as to whether the expenditure incurred is appropriate and justified.
2. A decision by the competent authorities of a Member State not to certify the accuracy of the facts and accounts concerning a portion of the expenditure in respect of a training operation to which the European Social Fund has contributed, on the ground that the expenditure cannot be justified or is disproportionate, must be regarded as a proposal addressed to the Commission of the European Communities for that portion of the expenditure to be held to be ineligible.
3. The reduction or withdrawal of the national contribution proposed by the competent authorities of a Member State pursuant to a decision not to certify the accuracy of the facts or accounts as regards certain expenditure must be made the subject of a final decision by the Commission concerning the portion of the aid corresponding to the assistance from the European Social Fund. That final decision of the Commission approving the balance to be paid determines the amount of the balance to be paid from the national contribution.
4. Community law does not preclude the competent authorities of a Member State from requiring, as a purely protective measure, repayment of the national contribution and of the assistance from the European Social Fund before the adoption by the Commission of its final decision.
5. Certification, for the purposes of the second sentence of Article 5(4) of Regulation No 2950/83, of the accuracy of the facts and accounts in the final payment claim in respect of a training operation does not preclude a Member State from undertaking a subsequent reassessment of the final payment claim and from submitting to the Commission, if necessary, a revised application proposing that the assistance be reduced.