EN Official Journal of the European Union L 14/1

COMMISSION DECISION

of 29 June 2011

on State aid granted by France to the Institut Français du Pétrole (Case C 35/08 (ex NN 11/08))

(notified under document C(2011) 4483)

(Only the French text is authentic)

(Text with EEA relevance)

(2012/26/EU)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union (1), and in particular the first subparagraph of Article 108(2) thereof,

Having regard to the Agreement on the European Economic Area (2), and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments pursuant to the provisions cited above (3),

Whereas:

1 PROCEDURE

(1) In the course of a formal investigation in State aid case No C 51/05, concerning aid granted by France to the Institut Français du Pétrole (4), the French authorities informed the Commission, by letter dated 18 July 2006, registered as received on 19 July 2006, that on 7 July 2006 the Institut Français du Pétrole (‘IFP’), which had formerly been a trade body (établissement professional) within the meaning of the legislation known as Law No 43-612 of 17 November 1943 on the management of trade interests (loi sur la gestion des intérêts professionnels), had now been converted into a publicly owned industrial and commercial establishment (établissement public à caractère industriel et commercial — ‘EPIC’). This conversion was evidenced in two documents which the French authorities enclosed with their letter: i) Decree No 2006-797 of 6 July 2006 establishing the constitution of the publicly owned establishment IFP (décret portant statuts de l’établissement public IFP), and ii) Article 95 of Programme Law No 2005-781 of 13 July 2005 establishing the energy policy guidelines (loi de programme fixant les orientations de la politique énergétique), under which the Decree cited above had been issued.

(2) By letters dated 3 August 2007 and 7 May 2008, the Commission requested information from the French authorities; they replied by letters dated 28 September 2007 and 26 June 2008 respectively.

(3) On 16 July 2008, in a previous case, the Commission adopted a decision on a first measure implemented by France to assist the IFP group (‘decision C 51/2005’) (5). In that decision, the Commission stressed that the question of the existence of additional State aid, in the form of a potential unlimited State guarantee stemming from the EPIC status of IFP, would be the subject of a separate investigation in another proceeding.

(4) This second proceeding under Article 108(2) TFEU was the subject of a Commission decision dated 16 July 2008 (‘the opening decision’) (6), taken pursuant to Article 4(4) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (7) (‘the Procedural Regulation’), against the unlimited State guarantee from which the IFP group was potentially benefiting.

(5) The Commission published the opening decision in the Official Journal of the European Union on 11 October 2008, asking interested parties to submit their comments on the measure.

(6) The Commission received observations from France by letter dated 14 October 2008.

(7) By letter dated 6 November 2008, registered as received by the Commission on the same day, the legal advisers of UOP Ltd (‘UOP’) informed the Commission that their client wished to comment on the measure. In view of the time needed for translation, they asked for extra time until 30 November 2008 in which to send their comments. By letter dated 7 November 2008, the Commission accepted that this request was justified and agreed to extend the deadline for UOP’s reply until 30 November 2008. By letter dated 28 November 2008, registered as received by the Commission on the same day, UOP’s legal advisers forwarded their client’s comments on the opening decision.

(8) In the same letter of 28 November 2008 UOP’s legal advisers sought permission for their client to submit additional comments in the course of the proceeding. By letter dated 17 December 2008, the Commission acceded to this request, agreeing to extend the deadline for UOP’s reply until 23 January 2009 to enable it to submit any additional comments. By letter dated 23 January 2009, UOP’s legal advisers forwarded additional comments from their client.

(9) By letter dated 6 May 2009, the Commission communicated to the French authorities all the comments made by UOP on the opening decision, where necessary in a confidential version. It asked them to send it their comments by 8 June 2009 at the latest. By letter dated 2 June 2009, the French authorities requested that this time limit be extended until 22 June 2009, since, in their view, the comments submitted by the third party required detailed and in-depth analysis and the consultation of several ministerial departments. By letter dated 9 June 2009, the Commission agreed to this extension until 22 June 2009. By letter dated 22 June 2009, the French authorities forwarded their observations on the comments made by UOP.

(10) By letter dated 29 July 2009, the Commission asked the French authorities for additional information, requesting a reply by 24 August 2009. By letter dated 19 August 2009, the French authorities asked for an extension until 7 September 2009, to which the Commission acceded by letter dated 20 August 2009. The French authorities finally provided the information requested by letter dated 8 September 2009.

(11) By letter dated 20 November 2009, the Commission requested further information from the French authorities, asking for a reply within twenty days. By letter dated 14 December 2009, the French authorities asked for an extension until 22 January 2010, which the Commission granted by letter dated 18 December 2009. The French authorities finally supplied the information requested by letter dated 13 January 2010.

(12) On 20 May 2010, a meeting organised by the Commission was held in Brussels to discuss with the French authorities the consequences for the present case of the decision adopted by the Commission on 26 January 2010 concerning State aid granted to La Poste by State aid measure No C 56/07 (ex E 15/05) (‘decision C 56/2007’) (8). La Poste was an entity governed by public law which up to that time had a status that could be deemed equivalent to that of an EPIC (9), and the case concerning it (the ‘La Poste case’ or the ‘postal case’) presented significant similarities with the measure at issue, so much so that the French authorities had put forward the same arguments,mutatis mutandis, in their comments on each of the two cases. On 4 June 2010, a list of additional questions was sent to France by e-mail, since the Commission wished to receive a written contribution from the French authorities on the various points covered during this meeting. On 16 July 2010, the French authorities supplied the information requested.

(13) By letter dated 29 September 2010, the Commission asked the French authorities to transmit additional information, requesting a reply within 20 days. By letter dated 7 October 2010, the French authorities asked for an extension until 26 November 2010; the Commission agreed by letter dated 8 October 2010. The French authorities finally provided the information requested by letter dated 26 November 2010.

2 THE IFP GROUP

(14) As indicated by the Commission in the opening decision and in decision C 51/2005 (10), IFP performs three tasks: — research and development in the fields of oil and gas prospecting and refining and petrochemicals technologies, — the training of engineers and technicians, and — the provision of sector information and documentation. A contract of objectives with the State lays down the broad lines of its work for five years at a time.

(15) Furthermore, IFP directly and indirectly controls commercial enterprises with which it has concluded exclusive research and licensing agreements. On the basis of a body of consistent evidence, the details of which are recalled in recital 137, the Commission considered in decision C 51/2005 that the combination of the public limited companies Axens, Beicip-Franlab and Prosernat, together with their parent, IFP, constituted an economic group (the ‘IFP group’) for purposes of competition law.

(16) Axens is active in the market for catalysts and technologies for the refining and petrochemicals industries, and in 2006, when the legal form of its parent changed, its consolidated turnover was EUR 308,45 million. IFP and Axens are linked by two exclusive framework licensing and product licensing agreements and an industrial research agreement (11). The subsidiary pays the parent royalties under the licensing agreements and remuneration […] (13) for access to IFP’s research capacity.

(17) Beicip-Franlab specialises in the publication and distribution of deposits exploration software and in consultancy and advisory services. In 2006, its turnover was EUR 42 million. An exclusive development, marketing and use agreement, signed in 2003 for a period of ten years, provides that Beicip-Franlab [receives proposals from IFP relating to the results of its research] (**) into the algorithms, models and methodologies [constituting the outcome of the research of] (**) IFP in the field of deposit exploration, and may request permission from IFP to produce products on that basis. Beicip-Franlab covers all of the product development costs borne by IFP. In addition, Beicip-Franlab makes various additional payments […] (*) to cover maintenance and rights of use. An amendment was signed in 2005, which modifies the payment arrangements while at the same time retaining the principle of total coverage of development costs by Beicip-Franlab.

(18) Prosernat provides consultancy and other services and supplies gas treatment and sulphur recovery plants. In 2006, its turnover was EUR 49,9 million. On 18 August 2003 IFP and Prosernat signed a framework licensing agreement and an industrial research agreement, with retroactive effect from 1 January 2002, for a period of 10 years. Under these agreements, Prosernat has an exclusive licence for the patents of IFP and [IFP offers it the results of its] (**) research […] (*) in the field of gas treatment and sulphur recovery technologies. Prosernat pays its parent a fee out of the annual turnover for the licence for the processes, and a fee on a case-by-case basis for equipment. The IFP’s remuneration for Prosernat’s access to the results of the research work amounts to […] (*) % of Prosernat’s global annual turnover.

(19) In accordance with Article 6 of decision C 51/2005, a clause was inserted in 2009 in the exclusive agreements governing the remuneration to IFP to be paid by its subsidiaries Axens et Prosernat (14), so as to ensure that IFP received a minimum variable remuneration, covering at least 25 % of the costs of feasibility studies preparatory to industrial research activities, 50 % of the costs of industrial research and, where appropriate, 75 % of the costs of pre-competitive development activities, within the meaning of the Community framework for state aid for research and development of 17 February 1996 (‘the 1996 R&D Framework’) (15), carried out by IFP in the subsidiaries’ fields of activity (16).

(20) In accordance with the opening decision, the investigation of the measure should take account of the potential impact of the State guarantee arising from the EPIC status of IFP on all the activities of the IFP group, including the publicly owned establishment IFP and its three subsidiaries governed by private law (17).

3 DESCRIPTION OF THE MEASURE

(21) Until 2006, IFP was a legal person governed by private law, a trade body within the meaning of Law No 43-612 of 17 November 1943 on the management of trade interests, placed under the economic and financial supervision of the French Government.

(22) The principle that IFP was to be converted into an EPIC was laid down in Article 95 of Programme Law No 2005-781 of 13 July 2005 establishing the energy policy guidelines. The conversion became effective from the publication in the Journal Officiel de la République Française of Decree No 2006-797 of 6 July 2006 establishing the constitution of the publicly owned establishment IFP.

(23) From the date of its change of legal form, IFP, as en EPIC, became a legal person governed by public law (18).

(24) The legal implications of the EPIC form are explained in detail in part 2 of decision C 56/2007 (‘Description of the measure’) and in part 3.2.1 of the opening decision, to which the Commission refers mutatis mutandis.

4 REASONS FOR INITIATING THE FORMAL INVESTIGATION PROCEDURE

(25) In the opening decision, the Commission began by expressing doubts about the special arrangements governing the bankruptcy of EPICs, which departed from the ordinary law on such matters. It considered that these were akin to an unlimited State guarantee mechanism which mobilised public resources: — EPICs, as legal entities governed by public law, are not subject to insolvency and bankruptcy procedures, by virtue of the general principle of the immunity from seizure of the assets of legal entities governed by public law, which has been recognised by the French courts, including the Court of Cassation (19), since the late nineteenth century. For further details, the Commission refers to section 3.2.1.1 of the opening decision, recitals 38 to 40 (20). — EPICs are subject to the Law of 16 July 1980 and its implementing rules. These expressly identify the State as the authority responsible for covering the debts of publicly owned establishments. They confer on it important prerogatives, such as the issuing of a mandatory payment order and the creation of sufficient resources, and organise a principle of last-resort State liability for the debts of legal entities governed by public law. For further details, the Commission refers to section 3.2.1.2 of the opening decision, recitals 41 to 45 (21). — In the event of the winding up of an EPIC, the general principle applies that its debts will be transferred to the State or to another public entity (22), which means that creditors of an EPIC have an assurance that they will not lose the money they are owed by a publicly owned establishment. For further details, the Commission refers to section 3.2.1.3 of the opening decision, recitals 46 to 51 (23). — EPICs may possibly also have preferential access to Treasury imprest accounts. For further details, the Commission refers to section 3.2.1.4 of the opening decision, recital 52 (24).

(26) As explained in recitals 65 to 74 of the opening decision, to which the Commission refers for more details, the clarifications to legislation and regulations proposed by the French authorities did not at first sight seem sufficient to assuage these doubts.

(27) The Commission said that it could not be ruled out that there might be a selective economic advantage, mainly through funding terms considered more favourable, even if IFP and its subsidiaries were not the subject of a financial rating by an external rating agency. The IFP group might also have been advantaged in its dealings with customers and suppliers in so far as they believed their claims to be covered by a State guarantee. Consequently, it could not be ruled out at the preliminary examination stage that in the case of the supply or purchase of goods or services involving a claim, the suppliers or customers concerned would grant terms to IFP that were better than those they would have granted to an undertaking not benefiting from a State guarantee.

(28) On the basis of the information available at the end of its preliminary examination, the Commission considered that the unlimited nature of the guarantee, especially as regards its duration, amount and scope, made it extremely difficult to calculate the amount of the market premium that IFP ought to pay the State for such protection.

(29) Finally, the Commission doubted whether the aid was compatible with the internal market, particular because it did not at first sight appear to be intended to facilitate the development of certain economic activities or regions.

5 OBSERVATIONS AND PROPOSALS PUT FORWARD BY THE FRENCH AUTHORITIES

5.1 INITIAL OBSERVATIONS BY THE FRENCH AUTHORITIES

(30) Following the opening decision cited above, the French authorities submitted observations and proposals to the Commission by letter dated 14 October 2008. That letter supplemented the observations and proposals set out in the previous letters from the French authorities (25) that were summarised in the opening decision.

(31) In their observations of 14 October 2008, the French authorities pointed out, as a preliminary point, that the procedure against the IFP group had been initiated in parallel to the postal case cited above; they said they were therefore reiterating the same arguments mutatis mutandis as those they developed during the examination of that case (26). Despite these similarities, the French authorities nevertheless wished to draw attention to the specific features of IFP: it was a research organisation assigned a three-fold task in the general interest (research, training and documentation), with an overwhelming majority of non-economic activities, and this justified the public funding granted to it. Moreover, they specified the reasons for its conversion into EPIC form, which they said was intended to ensure that IFP’s legal form was consistent with the nature of its activities and its method of funding; relinquishing the form of trade body governed by private law would bring IFP closer to the public sphere.

(32) The French authorities disputed the existence of State aid, since, in their opinion, two of the conditions laid down in Article 107(1) TFEU were not met: the mechanism at issue did not involve any transfer of State resources (5.1.1) and did not confer any advantage on IFP (5.1.2).

5.1.1 THERE IS NO GUARANTEE IMPUTABLE TO THE STATE INVOLVING A TRANSFER OF STATE RESOURCES

(33) According to the French authorities, (A) publicly owned establishments do not enjoy any guarantee because of their legal form, and (B) the Commission’s argument in the opening decision is flawed.

A. No unlimited State guarantee

(34) As explained in recitals 41 to 45 of decision C 56/2007, to which the Commission refers mutatis mutandis, the French authorities develop five pleas in law in support of their arguments.

(35) First, no legislation or decision lays down the principle that the State would, out of principle, indefinitely guarantee the debts of EPICs.

(36) Second, the Council of State has found against the existence of guarantees, in particular in its judgment in Société de l’hôtel d’Albe (27) and in its two judgments in the Campoloro case (28).

(37) Third, the Organic Law of 1 August 2001 governing the Finance Act (the ‘LOLF’) lays down that only a provision of a finance act can create a guarantee (29), and the Council of State explicitly confirmed this in its 2006 annual report (30). According to the expert called upon by the French authorities in the postal case cited above (31), therefore, it has been legally impossible to give an implied guarantee since the full entry into force of the Organic Law governing the Finance Act on 1 January 2005. Debts contracted since 1 January 2005 are therefore not covered by an implied guarantee. As for debts incurred before 1 January 2005, the expert takes the view that, in the absence of a court judgment, it is impossible to determine whether it might be held that implied guarantees given before 1 January 2005 which were not expressly authorised by a finance act retain their validity on the basis of respect for the constitutionally protected rights of creditors.

(38) Fourth, France considers that if EPICs enjoyed a State guarantee, the change in their legal form would require the introduction of new measures to protect creditors’ rights. Since such a mechanism has never been introduced (32), France concludes conversely that EPICs do not benefit from any State guarantee.

(39) Fifth, the French authorities refer to an article by Mr Labetoulle, a former president of the litigation division of the Council of State, according to which ‘in law, there is nothing automatic about the granting, enjoyment and scope of this guarantee [a State guarantee that applies automatically to State-owned public establishments]’ (33).

B. Flawed Commission argument (34)

(40) The French authorities consider that, as far as EPICs are concerned, (a) the reimbursement of individual claims is not guaranteed, and (b) there is no assurance of the continued existence of the publicly owned establishment or of its obligations.

a) The reimbursement of individual claims is not guaranteed

(41) As explained in recitals 46 to 49 of decision C 56/2007, to which the Commission refers mutatis mutandis, the French authorities consider that the Law of 16 July 1980 cannot serve as a basis for a guarantee. In the light of the legislative history of the Law, an interpretation of the Campoloro decisions of 10 November 1999 (35) and 18 November 2005 (36), and the academic literature on the subject (37), France argues that the Law of 16 July 1980 does not impose an obligation on the State to commit its own resources. The expression ‘y pourvoit’ (‘shall do so’) in Article 1 confers on the State only a power of ‘substitution’ for the executive of the person whom it replaces, in the exercise of which it is a matter of principle that the substitute has the same powers as the person replaced. When acting as a substitute, therefore, the State may exercise only the powers of that executive, which do not include access to the State budget, and the granting of an exceptional subsidy is outside the scope of the power of substitution.

(42) Furthermore, as indicated in recitals 50 to 53 of decision C 56/2007, to which the Commission refers mutatis mutandis, the French authorities maintain that the State cannot incur strict liability solely on the ground of a lack of assets. According to the French authorities, any guarantee requires the guarantor to accept the fact of the guarantee. Where liability arises out of responsibility for a fault or, in the case of strict liability, for the consequences of one’s own actions, there can be no question of a guarantee. According to France, the liability of the State cannot be incurred on the sole ground that the prefect or supervising authority was unable to take any measures that could allow the claim to be repaid because of the financial and asset situation of the publicly owned establishment. There is no fault: inaction on the part of the prefect or the supervising authority is not necessarily a fault. The French authorities recognise that when implementing the procedure laid down by the Law of 16 July 1980 the representative of the State is subject to the requirement of continuity of the public service, but consider that even if a court were to order that a creditor be compensated, such compensation would merely place the creditor in the same position that he would have been in under ordinary law, because under ordinary law the asset would have been sold and the body of creditors would have received the corresponding sum. There is therefore be no advantage to the creditor.

b) The continued existence of IFP or of its obligations is not guaranteed

(43) As explained in recitals 54 to 56 of decision C 56/2007, to which the Commission refers mutatis mutandis, the French authorities consider that the inapplicability to legal persons governed by public law of the administration and winding-up procedures provided for under ordinary law does not exclude the possibility of the bankruptcy of an EPIC or prevent bankruptcy proceedings being brought against it. They challenge the Commission’s analysis, which is based on its Notice on State aid in the form of guarantees (‘the Guarantees Notice’) (38), and consider that in the case in point the Commission has not demonstrated the existence of ‘more favourable funding terms’ attributable to the exclusion of the possibility of bankruptcy, and has not established that IFP cannot go bankrupt, nor that insolvency proceedings are impossible: the Law of 1985 is merely a procedural law, and the fact that EPICs lie outside its scope does not mean that administration, winding-up or ad hoc bankruptcy proceedings cannot be brought against them.

(44) Moreover, as explained in recitals 57 to 67 of decision C 56/2007, to which the Commission refers mutatis mutandis, the French authorities maintain that the application of the ‘procedure’ introduced by the Law of 16 July 1980, rather than the collective procedure under ordinary law, does not confer any advantage on the creditor. To assess whether the application of a specific procedure in the event of insolvency confers an advantage on the entity subject to the procedure as compared with undertakings subject to commercial law, they challenge the need to fulfil the criteria of publicity (39) and equivalence (40) referred to by the Commission in recital 81 of the opening decision (41), but they use these same criteria to analyse the procedure established by the Law of 16 July 1980. As regards the publicity criterion, they consider that the procedure is correctly identified by the rating agencies as applicable in the event of the insolvency of an EPIC; as regards the equivalence criterion, they draw a distinction depending on whether or not there is a requirement for continuity of the public service, at the same time noting that the financial situation of IFP and its subsidiaries makes it unlikely that IFP might be short of assets, since available funds and investments at the end of 2007 (EUR 150,3 million) represented approximately five times the amount of borrowings and financial liabilities (EUR 25,2 million): (a) If there is no requirement for continuity of the public service, in the event of lack of assets of the publicly owned establishment, application of the procedure introduced by the Law of 1980 would not place the creditors in a more favourable position than if the procedure under ordinary law had been applied: they would recover the same amount as the creditors of an entity subject to commercial law, i.e. the proceeds from the sale of the assets, and would no longer have any redress at the end of the procedure (42), since, according to France, the State cannot be held liable solely on the ground of lack of assets. Only two aspects would be different: — The absence of a single procedure for all creditors: unlike the procedure under private law, whereby claims are processed en masse and creditors are satisfied in decreasing order of priority and pro rata from the amounts available, the procedure introduced by the Law of 16 July 1980 requires creditors to take action to protect their rights. The approach of the Law of 16 July 1980 is ‘first come, first served’. — It is the representative of the State who, under the supervision of the administrative court (monitoring for gross negligence as established by the Council of State in the Campoloro judgment cited above), takes on the role equivalent to that of the liquidator and court-appointed administrator. (b) In the event that the continuity of the public service has to be guaranteed, the French authorities admit that the representative of the State, when exercising the powers conferred by the Law of 16 July 1980, could decide not to sell certain assets needed to perform a public service task. This failure to sell certain assets would then be reflected, if the State did not pay compensation, in lower proceeds from the assets and a corresponding reduction in the amounts recoverable by creditors. According to the French authorities, such a procedure would not confer on IFP’s creditors rights greater than those they would have had under commercial law. However, the French authorities admit that, in such an event, the State might incur strict liability, and would have to compensate creditors for the loss they had suffered (not exceeding the market value of the assets retained by the State for the continuity of the public service). The creditors would therefore potentially be reinstated in the same situation as that which would have resulted from the application of ordinary law. The French authorities conclude that the procedure introduced by the Law of 16 July 1980 does not confer any advantage over the procedure under ordinary law and that there is therefore no justification for subjecting IFP directly to a procedure such as that which applies under ordinary law.

(45) In the opening decision, in particular in recital 82, the Commission referred specifically to the French consolidating instruction No 02-060-M95 of 18 July 2002, on the financial and accounting regulation of national publicly owned industrial and commercial establishments, and to the guide to the financial organisation of the creation, conversion and abolition of national publicly owned establishments and of public interest groups (Guide sur l’organisation financière des créations, transformations et suppressions des établissements publics nationaux et des groupements d’intérêt) of 14 November 2006; as explained in recital 68 of decision C 56/2007, to which the Commission refers mutatis mutandis, the French authorities contend that the instruments in question are neither applicable nor transferable to IFP.

(46) Concerning the recapitalisation of IFP’s subsidiaries, the French authorities take the view firstly that the question raised in recital 80 of the opening decision should be considered not in order to establish the existence of any State guarantee, but rather in order to measure the potential effects of such a guarantee, which could place IFP and its subsidiaries in a preferential situation on account of the easier terms for recapitalisation. They argue that the Commission’s argument is based on two incorrect ideas: — On the one hand, the Commission commits an error in its reasoning regarding any support that IFP could provide to its subsidiaries through an intra-group transfer, since the conditions on which the parent of a group can support one of its subsidiaries in difficulty are strictly regulated by company law, even if it is a legal person governed by public law (43), and are totally unrelated to the concept of undertaking within the meaning of competition law. — On the other hand, the French authorities deny that the EPIC status of IFP, with any possible State guarantee that such a status might imply, enables it to recapitalise its subsidiaries more easily than group parent companies with a legal form governed by private law. According to the French authorities, the fact that a company temporarily bears the losses of one of its subsidiaries is part of the normal operation of a group, as the European Union court has already recognised (44), and the intervention of a public investor acting according to the same rules of conduct as a private investor is not considered to contain State aid elements within the meaning of Article 107(1) TFEU (45). This is the case in particular for IFP, which has the legal possibility (and not the obligation) to recapitalise a subsidiary in difficulties according to the same assessment criteria as any prudent investor. Finally, the French authorities deny that EPICs have any possibility at all of ‘direct access’ to ‘Treasury imprest accounts’. They say that the budgetary mechanism of the ‘financial assistance account’, regulated by Article 24 of the Organic Law governing the Finance Act, provides for the constitution of appropriations accounts, capped by the Finance Act, which allow the State to grant advance payments to various bodies, if it wishes and if it is able to do so (in particular in the light of European Union law). According to the French authorities, EPICs have not got ‘direct access’ to these accounts.

5.1.2 NO ADVANTAGE IS CONFERRED ON IFP OR ITS SUBSIDIARIES

(47) The French authorities consider, first, that it cannot be concluded from the Guarantees Notice cited above that an advantage exists in the present case; second, that an extension to IFP’s subsidiaries, which are public limited companies under ordinary law, of any advantages from which IFP might benefit on account of its EPIC status would be in contradiction with the Commission’s decision-making practice; and third, that no proof has been given of an actual economic advantage to IFP and its subsidiaries in the present case.

(48) The French authorities consider that the Commission misinterprets point 1.2 of the Guarantees Notice cited above, which provides that ‘The Commission also regards as aid in the form of a guarantee the more favourable funding terms obtained by enterprises whose legal form rules out bankruptcy or other insolvency procedures or provides an explicit State guarantee or coverage of losses by the State’: — Firstly, the French authorities deny that IFP, as an EPIC, possesses a legal status which rules out any bankruptcy or insolvency proceedings. In any event, they say, the Commission has not proved this, but provided evidence to show only that IFP’s status would not allow the application of one specific procedure (namely the procedure introduced by the Law of 25 January 1985). — Secondly, the French authorities deny that the fact that under the law and its own constitution a body cannot be made the subject of bankruptcy or insolvency proceedings automatically secures it more favourable funding terms on the market. In order to conclude that an enterprise is receiving aid in the form of a guarantee, the Commission must first, in application of point 1.2 of the Guarantees Notice cited above, demonstrate that it dos indeed receive more favourable funding terms.

(49) The French authorities contend that in the opening decision, when examining potential advantages to IFP’s subsidiaries arising out of the existence of an unlimited guarantee for their parent EPIC, the Commission disregarded its own decision-making practice. They say the Commission’s line of reasoning contradicts the approach it took at the time of the creation of La Banque Postale (46). Like IFP’s subsidiaries, La Banque Postale was a public limited company wholly owned by an entity similar to an EPIC. Leaving aside the commitments given by France in that case, the Commission took the view that the legal status of public limited company under ordinary law was by itself sufficient to rule out the possibility of an unlimited guarantee to the subsidiary. Following the same reasoning, according to the French authorities, it must be held that IFP’s subsidiaries, which likewise have the legal form of public limited company under ordinary law, do not benefit from any unlimited guarantee conferred by the status of EPIC.

(50) Finally, the French authorities contend that the Commission has not demonstrated the existence of an actual economic advantage to IFP and its subsidiaries, and in the opening decision merely refers to funding terms ‘considered’ more favourable, without providing actual proof. European Union case-law requires the Commission to show that IFP’s EPIC status has in fact enabled it to obtain more favourable funding terms (47). The French authorities say that in the course of the procedure they provided evidence to show that IFP’s EPIC status had not procured and would not procure any financial advantage to IFP and its subsidiaries; in particular, the conversion of IFP was carried out with due regard for a general principle of continuity, especially in terms of its activity, organisation, accounting and financial regime (resources and accounting and financial rules) and tax treatment.

(51) The French authorities consider that the factors above demonstrate that: — the financial situation of IFP and its subsidiaries is sound, which makes the question of possible bankruptcy and consequently last-resort State intervention irrelevant; — the terms for the short-term funding of IFP and its subsidiaries are different for each of these entities, and result from specific negotiations conducted on a one-to-one basis with their respective banks; — the relations that IFP and its subsidiaries maintain with their suppliers and customers do not give rise to preferential conditions resulting from an expectation on the part of these suppliers and customers of a State guarantee.

(52) The French authorities conclude from this that: — the analysis set out by the Commission in its opening decision is questionable: IFP and its subsidiaries do not enjoy any State guarantee; — the Commission has not demonstrated the existence of an advantage to IFP and its subsidiaries deriving from IFP’s EPIC status; — the Commission has not, therefore, demonstrated the existence of State aid to IFP and its subsidiaries.

5.2 PROPOSALS BY THE FRENCH AUTHORITIES

(53) Nonetheless, in order to dispel any doubts on the part of the Commission, the French authorities have indicated that they are willing to implement the following measures if the Commission agrees to close the procedure by a decision finding that no aid is involved, in accordance with Article 7(2) of the Procedural Regulation cited above: — clarification of the Decree implementing the Law of 16 July 1980; — incorporation of a reference spelling out the absence of a guarantee in IFP’s contracts involving a claim; — incorporation of a reference spelling out the absence of a guarantee in the financing contracts of IFP’s subsidiaries.

5.2.1 CLARIFICATION OF THE DECREE IMPLEMENTING THE LAW OF 16 JULY 1980

(54) As specified in recitals 94 to 96 of decision C 56/2007, to which the Commission refers mutatis mutandis, the French authorities propose clarifying the interpretation of the Law of 16 July 1980 by amending the fourth subparagraph of Article 3(1) of the Decree implementing the Law (48). The proposed amendment is intended, they say, to dispel any misgivings concerning the scope of the expression ‘shall do so’ (y pourvoit) in the organisation of the supervisory power conferred on the prefect or on the supervising authority; the prefect or supervising authority would now have to release resources from the budget of the regional or local authority or the establishment concerned (49). According to the French authorities, this proposal would prevent the representative of the State, when exercising his supervisory power, from increasing the resources of the authority or establishment concerned by means of a subsidy from the State or an injection of public resources.

5.2.2 INCORPORATION OF A REFERENCE SPELLING OUT THE ABSENCE OF A GUARANTEE IN IFP’S CONTRACTS INVOLVING A CLAIM

(55) As explained in recitals 97 to 100 of decision C 56/2007 cited above, to which the Commission refers mutatis mutandis, the French authorities challenge the Commission’s view (50) that the State can be held liable solely on the grounds of the insolvency of IFP. However, they put forward a proposal based on the plea of accepted risk (l’exception de risque accepté, see the judgments of the Council of State in Sille (51) and Meunier (52)) under which, as they suggested in the postal case, IFP’s creditors would be officially informed that their claim does not enjoy a State guarantee and that, in the event of insolvency, the State will not be obliged to substitute itself for the undertaking financially to pay the claim. Consequently, the parties concerned would be exposing themselves to risk in full knowledge of the facts, and could not claim any right to compensation. The French authorities therefore undertake, jointly with IFP, to include the following statement in the financing contract for each transaction (for all instruments covered by a contract): ‘The issue/programme/loan does not enjoy any form of direct or indirect State guarantee. In the event of insolvency, the State would not be obliged to act as financial substitute for IFP for payment of the claim.’

(56) As explained in recital 101 of decision C 56/2007 cited above, to which the Commission refers mutatis mutandis, the French authorities have also noted the misgivings set out by the Commission in recital 71 of the opening decision, which indicated that the plea of accepted risk was a rule established by case-law that could develop; that it was based on secondary law instruments which could be annulled in the event of conflict; and, finally, that the proposal of the French authorities did not cover all possible scenarios, since debts could be not only financial but also commercial or other forms of debt again.

(57) As specified in recitals 102 to 104 of decision C 56/2007, to which the Commission refers mutatis mutandis, after reiterating their opposition in principle to the Commission’s position that the State may incur strict liability solely on the grounds of IFP’s the lack of assets, the French authorities have provided additional information to address these misgivings: (a) The French authorities consider that the Commission’s first objection would seem to say that even if there is no actual provision to this effect in the national law of a Member State, the mere risk of a change in the case-law, i.e. a change in national law, is enough to create State aid. The Commission cannot argue that there is State aid because of a possible change in the law, which in this case is highly improbable, the plea of accepted risk being a general principle of public law that has been confirmed by case-law on many occasions, has never been contradicted, and has been widely commented. (b) Concerning the second objection, the French authorities recognise that statute law and regulations take precedence over contracts, and that a disputed clause can always be annulled. However, they consider that the objection does not in fact refer to any higher-ranking text, that it is not substantiated, and therefore has no weight. (c) Finally, as regards the third objection, the French authorities consider that it is based on a mere supposition of a possible belief or expectation among suppliers that their claims enjoy a State guarantee, a supposition which cannot by itself serve to demonstrate the existence of an advantage, but must be corroborated by information establishing that IFP and its subsidiaries have actually benefited from an economic advantage of this kind.

(58) Nevertheless, as specified in recital 106 of decision C 56/2007, to which the Commission refers mutatis mutandis, the French authorities indicate that they are willing to extend their proposal to include a statement concerning the absence of a guarantee to include all contracts involving a claim, so as to explicitly rule out any risk that the State might incur strict liability on the basis solely of the insolvency of IFP.

5.2.3 INCORPORATION OF A REFERENCE SPELLING OUT THE ABSENCE OF A GUARANTEE IN THE FINANCING CONTRACTS OF IFP’S SUBSIDIARIES AXENS, BEICIP-FRANLAB AND PROSERNAT

(59) To supplement the proposed mechanism, the French authorities make an additional proposal to the Commission, similar to that made on the creation of La Banque Postale, with regard to the terms on which IFP’s subsidiaries (Axens, Beicip-Franlab and Prosernat) are able to borrow on the market, under which an undertaking would be given that in the financing contract for each transaction (for all instruments covered by a contract) the following clause would be included in writing: ‘Pursuant to French law (in particular the need for express statutory authority for each guarantee), the present financing transaction shall not enjoy any form of direct or indirect State guarantee’.

(60) As specified in recitals 107 to 110 of decision C 56/2007, to which the Commission refers mutatis mutandis, the French authorities consider that the two clarification measures proposed (the details of which are set out in recitals 55 and 59) would allow the creditors of IFP and its subsidiaries to be made fully aware of their rights, so that France could not be held ‘responsible for the expectations created in the minds of IFP’s creditors concerning the existence of a guarantee’, or regarded as voluntarily maintaining an opaque legal situation that procures an advantage for IFP and is liable to commit the State’s resources, as the Commission indicated in recital 87 of the opening decision.

5.3 ADDITIONAL OBSERVATIONS FROM THE FRENCH AUTHORITIES

(61) By letters dated 16 July 2010 and 26 November 2010, the French authorities provided additional information which in their opinion showed that there was no State aid to IFP.

(62) In their letter dated 16 July 2010, as a preliminary point, they say that in the France Télécom case the European Union courts held that in order to establish the existence of State aid the Commission was obliged to demonstrate that there was a real advantage (53). They consider that in this case, the unlimited guarantee which according to the Commission arises from IFP’s legal form in reality confers no economic advantage on it. In their letter dated 26 November 2010, the French authorities say that in their opinion the burden of proof lies with the Commission. They draw attention to the requirements laid down in European Union case-law with regard to proof and reasoning, more especially by the General Court in the France Telecom case cited above and by the Court of Justice in Krantz (54) and more recently in Deutsche Post AG (55). The French authorities consider that the analysis presented by the Commission in this case is based ‘more on hypotheses than on an analysis in concreto’.

(63) Furthermore, in the view of the French authorities, the Commission considers that IFP could benefit from an advantage at three levels: (i) that of its relations with banks and financial institutions, (ii) that of its relations with suppliers, and (iii) that of its relations with third-party industrial partners that make use of its research services.

(64) The French authorities consider that in its dealings with banks and financial institutions IFP has so far drawn no economic advantage from its EPIC status. They provide evidence to show that: (i) over the long term, IFP recorded zero debt in the years 2005, 2006 and 2007 (56) and in 2008 and 2009, (ii) over the medium term, although IFP each year negotiated overdraft facilities with various banking institutions, it obtained rates comparable to market rates and in any case has never made use of these credit lines, and finally (iii) over the short term, IFP’s debt was close to zero or at zero during the period under review.

(65) As regards its dealings with suppliers, the French authorities consider that IFP, as a contracting authority, is subject to the disclosure and competitive procurement obligations laid down in Order (ordonnance) No 2005-649 of 6 June 2005 (57), and consequently that it cannot benefit from any advantage. In their letter dated 26 November 2010, the French authorities reiterate this analysis, and say that in their opinion the fact that IFP’s orders are subject to a tendering procedure in accordance Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (58) constitutes a guarantee sufficient to avoid distortion of competition in the market. According to France IFP has ensured competition between its suppliers, in line with the obligations arising from European Union law, and consequently cannot be accused of enjoying an unlawful advantage, at least in the absence of any specific evidence to that effect. The French authorities stress that recourse to electronic purchasing has been facilitated precisely in order to improve efficiency of public procurement: for example, recital 13 of Directive 2004/18/EC indicates that ‘This purchasing technique allows the contracting authority … to have a particularly broad range of tenders … and hence to ensure optimum use of public funds through broad competition.’ They refer to a Commission report which concluded that the public procurement legislation had had a positive impact in terms of lowering prices, the fall being presented as the ‘social benefit’ of fairer competition between tenderers (59). By imputing these economies to IFP’s EPIC status, the Commission is at odds with the spirit of the Directive, which sees the selection procedures as the key vector for better competition leading to a reduction in public procurement costs.

(66) Finally, with regard to IFP’s dealings with its customers, France says that the contract research activities concerned are the services provided by IFP at the request of a customer, third party or subsidiary, on a subject which comes within the scope of IFP’s task, does not involve strategic interests for IFP in terms of ownership of the results, is of a nature to enrich IFP’s knowledge and skills in the conduct of the public R&D programmes that it carries out, and does not come within the exclusive field of activities of its subsidiaries. The French authorities note that the research services that these customers acquire call for specific equipment and expertise.

(67) France contends that even if IFP were to benefit from its EPIC status in the performance of these economic activities, the advantage would have no material impact on the market. In particular, it would not be liable to distort competition or to affect trade between Member States. Over the period since the change of IFP’s status (which occurred in July 2006), the French authorities nevertheless acknowledge that IFP may potentially have benefited from a reduction in charges as a result of the lack of subscription to performance bonds, but say that on the basis of the sums usually charged by banks and insurance companies to provide this type of service the amount involved is negligible. The French authorities conclude that any such effect would not have the character of an advantage, which calls into question the very existence of State aid to IFP.

6 COMMENTS FROM THIRD PARTIES AND FROM THE FRENCH AUTHORITIES

6.1 OBSERVATIONS FROM UOP

(68) In its letter dated 28 November 2008, UOP submits that it has an interest n the proceedings (60), and goes on to put forward some general observations and to argue that the entity that it refers to as ‘IFP/Axens’ receives State aid: — IFP/Axens, consisting of the publicly owned establishment and its subsidiary Axens, is undeniably perceived by the market as a public entity (5.1.1); — the award of EPIC status to IFP/Axens has allowed and continues to allow significant distortion of competition in the process technologies market in which UOP operates, as it confers advantages in relations with suppliers, capital providers and customers (5.1.2).

6.1.1 MARKET PERCEPTION OF IFP/AXENS

(69) According to UOP, the French authorities’ argument that Axens is a separate economic entity, like the other IFP subsidiaries, is untenable. The Commission, argues UOP, has rightly pointed out that (i) Axens is wholly owned by IFP; (ii) the implementation by Axens of the R&D of IFP reflects strategic priorities decided by the State; (iii) the managers of the publicly owned establishment IFP participate in the management of Axens; (iv) Axens has an exclusive contract with IFP, which is crucial to the subsidiary’s economic activity; and (v) there is in particular an agreement providing for first call on and provision of staff.

(70) UOP adds that the image IFP and Axens present of their relationship, and the market perception of their relationship, also constitute decisive factors: — IFP and Axens present themselves on the market as a single economic entity, ‘IFP/Axens’. Axens’s Internet site mentions in particular that the company is ‘backed by nearly fifty years of R&D and industrial success’ (61). Axens’s advertisements for its technology refer to IFP. Axens and IFP staff sometimes visit their licensees together. — The industrial press illustrates the market perception of IFP/Axens as a single economic entity. UOP encloses extracts from press cuttings referring to the activities of ‘IFP/Axens’ in the field of process technology licences, or alternatively referring to such licences being provided by IFP via its subsidiary Axens. UOP also provides examples of articles or presentations in which Axens staff have given the impression that Axens is seen by IFP as comprising the entire activities of the industrial and procatalysis divisions.

6.1.2 THE ADVANTAGES CONFERRED BY THE EPIC STATUS

(71) UOP indicates that the fact that Axens is perceived by both suppliers and customers as disposing of unlimited State resources to finance its activities gives it a significant market edge. Even supposing that this is only a market perception, its importance is magnified in the context of the world economic crisis.

(72) As regards customers, the guarantees offered by IFP/Axens are of particular significance in a market where customers take account of long-term economic considerations before opting for a given technology. Taking the example of ‘aromatic compounds’, UOP explains, in substance, that before implementing such technologies, customers have to make very significant investments in the design and construction of the production infrastructures, which takes several years of work. However, the success of these industrial complexes is linked to the performance of the technologies used, with customers generally requiring them to be guaranteed by the seller of the processes (62). If the required performance level is not achieved, they will not hesitate to hold the assignee responsible and to require compliance with strict obligations regarding compensation. The long-term solvency of the assignee is consequently an important factor in the choice made by purchasers, not only for compliance with contractual obligations, but also for the prospects offered in the field of R&D as pledges of future improvements in the performance of the process acquired. IFP/Axens, perceived by the market as depending on the State, therefore has an advantage over its competitors, since purchasers have no particular reason to doubt its long-term survival.

(73) As regards suppliers, UOP considers that preferential terms may be granted to IFP/Axens as compared with its competitors; UOP cites the contracts signed jointly by IFP and Axens mentioned in the opening decision.

(74) As regards the financial markets, UOP considers that IFP/Axens benefits from preferential terms and interest rates on the capital markets as a result of the role of guarantor of last resort played by the State. Furthermore, in a context of financial crisis, the presence of the State, and the security it represents for investors, makes it possible to attract private capital at a time of shortage. Competing undertakings cannot obtain access to comparable funding, or can obtain it only on far less favourable economic terms. According to UOP, the effects of the economic and financial crisis have strengthened the potential of the measure to distort competition still further.

(75) In its letter dated 23 January 2009, UOP refers to its previous observations and to those sent in the course of the proceedings that led to decision C 51/2005 cited above. UOP considers that this information provides sufficient evidence of the importance of the solvency of co-contractors on the process licensing market concerned. It reiterates the argument that the customers of the IFP/Axens entity assume they are in a trading relationship with a State body, the long-term viability of which ensures that there is no risk. Finally, UOP asks the Commission to analyse the agreements between Axens and its customers, indicating that it is convinced that they contain no clause that would limit liability to Axens alone.

6.2 COMMENTS FROM THE FRENCH AUTHORITIES ON UOP’S OBSERVATIONS

(76) In their letter dated 22 June 2009, the French authorities consider that UOP’s comments are based on assertions that are mistaken, or in some cases entirely false, and in any event are not founded on any evidence that might demonstrate the existence of State aid to IFP or Axens.

(77) In substance, the French authorities deny any relevance to the allegation made that ‘IFP/Axens’ is perceived by the market as a public entity benefiting from advantages in relation to customers, suppliers and the financial markets, and reject the assertion that this ‘IFP/Axens’ is a State body whose long-term viability is assured.

(78) The French authorities develop two arguments: — firstly, ‘IFP/Axens’ is not a State body with unlimited resources at its disposal; moreover, there is no proof that this entity is perceived as such on the market (6.2.1); — secondly, IFP’s EPIC status confers no market advantage on Axens (6.2.2).

6.2.1 ‘IFP/AXENS’ IS NOT A STATE BODY WITH UNLIMITED RESOURCES

(79) The French authorities contend that contrary to UOP’s affirmations the suppliers and customers of ‘IFP/Axens’ do not perceive this undertaking as a State body with unlimited resources.

(80) Firstly, the French authorities refer to the legal analysis which they have sent the Commission and to their previous comments, which, they maintain, show that IFP’s EPIC status confers no State guarantee of any kind.

(81) Secondly, the French authorities note that UOP relies on an alleged belief in an unlimited State guarantee for IFP/Axens, a belief which has no existence in law and which is not by itself sufficient to demonstrate that there is State aid.

(82) Thirdly, even supposing that IFP does enjoy a State guarantee – which the French authorities deny – it is not true that any such guarantee would automatically extend to IFP’s subsidiaries on the ground that IFP and its subsidiaries form an economic group for purposes of competition law. France argues that IFP’s subsidiaries, and especially Axens, are private-law bodies subject to company law, and would not be covered by such a guarantee, especially because UOP’s theory of the automatic extension of guarantees within a group is contrary to the principle of the autonomy of subsidiaries. The concept of a group may have a meaning in competition law, but it is not recognised in company law, and the granting of guarantees within a group is subject to strict conditions of form and substance. This is the case in particular for IFP: Article 7 of IFP’s constitution provides for authorisation by the board of directors. In addition, the French authorities consider that the Commission has already taken note of this point, since it accepted that the legal status of Banque Postale, a legal person governed by private law, sufficed in itself to rule out the existence of any unlimited guarantee to Banque Postale (63).

6.2.2 AXENS DOES NOT DERIVE ANY ADVANTAGE ON THE MARKET FROM IFP’S EPIC STATUS

(83) UOP has argued, the French authorities say, that the market is likewise of the belief that the IFP/Axens entity is a State body with unlimited resources, and enjoys advantages in relation to customers, suppliers and creditors; but the French authorities contend that this argument is not based on any reliable evidence, and is undeniably refuted by the facts.

(84) The French authorities have submitted an internal memo from Axens’s legal and contracts department, entitled ‘Principles of legal security of Axens’ (64), which explains the relations between IFP and Axens. These relations are explicitly governed by the general rule that Axens does not ask for any guarantee from its parent for any reason whatsoever. The French authorities specify that no exception is possible to this rule that there can be no guarantee. The principle is also spelt out in full in the document, in the following terms: ‘IFP does not guarantee Axens’s acts or omissions’. The French authorities say that this rule applies to any contract or project that Axens might possibly conclude or conduct with customers, with suppliers or on the financial markets.

6.2.2.1 The relations between Axens and its customers

(85) UOP argues, say the French authorities, that the public guarantee has important implications for Axens’s long-term financial situation, especially in the light of the contractual guarantees and maintenance obligations traditionally provided for in licensing agreements (65); but there is no justification for this argument, nor has UOP substantiated the reasons why it is convinced that the Commission will not identify any provision limiting liability to Axens alone.

(86) The French authorities contend that the rule described in recital 84, according to which the subsidiary is not to apply for any guarantee from the parent, also applies to any guarantee that Axens might negotiate or conclude with a customer. They illustrate their argument with the example of aromatic compounds mentioned by UOP in its observations. They say that as a general rule, Axens chooses to limit its liability to a certain fraction of the fee […] (*). This guarantee limitation policy, which is one of the ‘Principles of legal security of Axens’, is consequently quite different from the customs of other undertakings operating in this field, which, according to the French authorities, are in the habit of granting unlimited guarantees in certain cases.

(87) Finally, the French authorities argue that the obligations regarding maintenance or repairs applicable in the event of a claim would not bring into play any financial cover on the part of IFP: (a) in the event of default by Axens, the capacity offered by its civil liability insurers through the various insurance policies under its world programme is well in excess of the maximum liability of Axens contractually agreed with its licensees; (b) the capacity for immediate or rapid mobilisation of Axens’ resources is also very considerable, in particular because of its low debt level; (c) the agreements between IFP and Axens explicitly limit IFP’s liability in the event of default on the part of one of Axens’ licensees to sums which are necessarily small, as they are correlated to the fee received by IFP; (d) Axens’ civil liability insurer expressly waives any recourse against IFP, for any reason whatsoever.

(88) The French authorities conclude that UOP’s assertions concerning advantages allegedly obtained by Axens on the process licensing market are invalidated especially by the fact that Axens has continually conducted a policy of limiting guarantees of liability granted to its customers.

(89) In their letter dated 8 September 2009, the French authorities state that the limitation of liability to customers is provided for in both the framework licensing agreement (66) and the product licensing agreement (67) concluded between IFP and Axens, which entered into force on 1 January 2001. These two agreements provide that if Axens can prove that its default originates in the services supplied by IFP, the financial liability of the latter will be limited to a percentage (68) of the sums in fact collected by IFP in fee pro rata to the sales transaction that forms the basis of the claim (product licence), and to the unit subject to a sub-licence or to the sales transaction carried out under a sub-licence that forms the basis of the claim (framework licence). In other words, IFP’s liability can never extend beyond 100 % of the sums received. Moreover, the framework licence provides that Axens is responsible for financial guarantees granted to sub-licensees with regard to technical performance of the processes. This means that IFP is not liable for technical guarantees given by Axens to its customers.

(90) In addition, it should be pointed out that the licensing agreements between Axens and its customers provide, conversely, that Axens’ financial liability is generally confined to […] (*) % of the royalties paid for each unit for which a claim is made. If for commercial reasons the guarantee given by Axens to its customer proves to be higher than that given to it by IFP, IFP’s liability is totally independent of that of Axens. The same principle is applied to any licence that IFP grants to third parties other than its subsidiaries.

(91) Finally, the French authorities add that when IFP performs services (studies, research to order, tests, etc.) for its customers, whether subsidiaries or firms outside the group, IFP always seeks to limit its liability. The liability accepted by IFP then consists in a commitment to rectify the work carried out, while at financial level the principle is that the liability is limited to […] (*) % of the remuneration actually received, with a maximum which may reach up to […] (*) % depending on the case. Therefore if the customer considers that the work carried out by IFP is defective, IFP can never be obliged to repeat the work ad infinitum.

6.2.2.2 The relations between Axens and its suppliers and the funding terms on the financial markets

(92) The French authorities deny any relevance to the assertion by UOP that the alleged belief in the existence of unlimited financial resources available to Axens secures it preferential terms from either its suppliers or the financial markets. France says that UOP has not provided the slightest proof in support of this allegation.

(93) The French authorities consider that the rule described in recital 84, according to which the subsidiary is not to apply for any guarantee from the parent, is sufficient to invalidate the hypothesis put forward by UOP.

(94) Furthermore, as regards Axens’s borrowing terms on the financial markets, and the terms available to Beicip-Franlab and Prosernat, the French authorities point out that they are prepared to give the Commission an undertaking that a clause would be included in writing in the financing contract for every transaction stating that ‘Pursuant to French law (in particular the need for express statutory authority for each guarantee), the present financing transaction shall not enjoy any form of direct or indirect State guarantee’ (69).

7 ASSESSMENT

7.1 EXISTENCE OF STATE AID WITHIN THE MEANING OF ARTICLE 107(1) TFEU

(95) Article 107(1) TFEU reads: ‘Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.’

(96) To establish the existence of State aid in the present case it must first be considered whether the EPIC status granted by France to IFP on 7 July 2006 involves the use of State resources (7.1.1) to provide an unlimited public guarantee covering economic activities (7.1.2). The extent of the cover by the State guarantee and the nature of the activities covered will allow the scope of this decision to be defined (7.1.3), and it will then have to be considered whether the measure in question confers a selective advantage on the IFP group (7.1.4) which may affect trade between Member States (7.1.5).

7.1.1 USE OF STATE RESOURCES IN THE FORM OF AN UNLIMITED GUARANTEE

(97) In view of its particular structure as an economic group for purposes of competition law, it is necessary to assess the potential impact of the unlimited State guarantee arising from the EPIC status of the publicly owned establishment IFP on the whole of the IFP group, i.e. on the publicly owned establishment itself and on its subsidiaries, by proceeding in two stages: — As regards the publicly owned establishment IFP, the impact of the unlimited guarantee arises directly from its EPIC status: as a legal person governed by public law, IFP is not subject to the ordinary law governing the administration and winding up of firms in difficulty. In the light of this particularity, the parent of the IFP group may carry on economic activities itself, under more advantageous conditions than other market participants not benefiting from comparable protection (7.1.1.1). — As regards the activities carried out directly by the IFP subsidiaries governed by private law, which, for their part, are entirely subject to the ordinary law of bankruptcy, any direct liability of the publicly owned establishment, and therefore of the State, seems impossible. If a subsidiary’s assets are insufficient, therefore, it has to be considered whether the creditors of Axens, Prosernat and Beicip-Franlab could benefit from an indirect mechanism whereby the parent would be liable for its subsidiaries, equivalent to a guarantee mechanism (7.1.1.2).

7.1.1.1 Unlimited State guarantee to IFP conferred by its EPIC status

(98) In decision C 56/2007, the Commission concluded (70) that the special factors intrinsically linked to the legal form of La Poste as a publicly owned establishment (71), and in particular the existence of a guarantee ensuring the payment of individual claims and the continued existence of La Poste or its obligations or both, implied that the State performed the role of guarantor of last resort in respect of the economic activities of the publicly owned establishment.

(99) In the present case, the Commission considers that the arguments set out in decision C 56/2007 can essentially be transposed to the EPIC status of the publicly owned establishment IFP, and that IFP also enjoys a special legal position with regard to the payment of its creditors and its continuation in business in the event of insolvency. For the purposes of the present analysis, therefore, the Commission will refer to the arguments set out in section 4.1, ‘Classification as aid’, of decision C 56/2007.

A. Guarantee of payment of individual claims

(100) It is first necessary to consider the argument of the French authorities that the existence of a State guarantee in favour of EPICs is ruled out by the legislation or the case-law, before showing that in the event that IFP were in default its creditors would benefit from a more favourable procedure than the creditors of undertakings governed by ordinary law.

a) Rejection of the arguments of the French authorities

(101) Contrary to the French authorities’ affirmation, the Commission is able to conclude that French law does acknowledge the existence of implied guarantees, and in particular the existence of a State guarantee deriving from the status of publicly owned establishment. The Commission rejects the arguments of the French authorities for the following reasons.

(102) Firstly, where the French authorities assert that there is no legislation or decision laying down the principle that the State is to guarantee the debts of EPICs, the Commission refers to recitals 120 and 121 of decision C 56/2007, mutatis mutandis. The Commission considers, on the contrary, that although it is true that there is no legislation or decision confirming or excluding the existence of an express State guarantee in favour of EPICs, this absence does not mean that there can be no implied guarantee.

(103) Secondly, where the French authorities consider that the courts have held that there is no such guarantee, notably in the judgments in Société de l’hôtel d’Albe (72) and Campoloro (73), the Commission refers to recitals 122 to 124 of decision C 56/2007, mutatis mutandis. In Société de l’hôtel d’Albe, as the Commission expert pointed out in the postal case, the judgment did not refer to the precise situation in which the guarantee would come into play (74). In Campoloro (75), the Commission considers, on the contrary, that the judgments establish a scheme of State liability in proceedings for the recovery of the debts of publicly owned establishments which displays all the characteristics of a guarantee mechanism.

(104) Thirdly, in the postal case the French authorities argued that the debts contracted by EPICs since the entry into force of the Organic Law governing the Finance Act on 1 January 2005 did not qualify for an implied guarantee: the Commission considers that this argument cannot hold: (a) The Commission emphasises that the change of legal form of the publicly owned establishment IFP occurred on 7 July 2006, i.e. after the entry into force of the Organic Law governing the Finance Act. Under such circumstances, it is not necessary to examine the arguments put forward by the French authorities’ expert in the postal case regarding debts contracted before 1 January 2005, despite the fact that the French authorities refer to this mutatis mutandis in their comments. Debts contracted by IFP before 1 January 2005 were contracted by a trade body within the meaning of Law No 43-612 of 17 November 1943 on the management of trade interests, and therefore by a legal person governed by private law, and consequently could not be covered, at the time they were entered into (76), by the unlimited guarantee conferred by the EPIC status. (b) The Commission nevertheless notes, as its expert pointed out in the postal case, and as it explained in recital 130 of decision C 56/2007, to which it refers mutatis mutandis, that the obligation to enter State guarantees in a Finance Act is confined to the ‘giving’ (octroi) of such guarantees. To ‘give’ a guarantee the State must confer a guarantee on an organisation or an operation by an express manifestation of its intention. The scope of the obligation to enter guarantees in the Finance Act does not extend to guarantees that arise out of the legal form of an organisation, or out of an obligation established in case-law, which are guarantees of an implied and automatic character. This category is not the result of a decision of the State, but of the fact that the State places itself in an existing legal framework, the guarantee being only one effect of that framework (77). (c) The Commission concludes, as it did in recital 131 of decision C 56/2007, to which it refers mutatis mutandis, that the argument put forward by the French authorities on the basis of the Organic Law governing the Finance Act is not convincing, because the fact that it is not stated in any Finance Act that the State extends a guarantee to IFP by virtue of its legal form does not mean that there is no implied guarantee. The Commission is not in any event bound by the description of the measure as a ‘guarantee’ for purposes of French law, or by the fact that a guarantee is or is not caught by the Organic Law governing the Finance Act. The only relevant consideration is how the measure is to be described for purposes of Union law. Union law recognises the existence of an implied guarantee once a Member State legally has to repay a claim on another person in the event of that person’s defaulting (78).

(105) Fourthly, the Commission rejects the argument of the French authorities that, if a State guarantee does exist in favour of EPICs, any establishment of a new EPIC (including by change of legal form) would necessitate measures to preserve the rights of creditors arising before the change, and that conversely (modus tollens), since no such mechanism has ever been set up (79), no guarantee exists in favour of the publicly owned establishment IFP: (a) As pointed out by the Commission’s expert in the postal case, and as recalled in recital 133 of decision C 56/2007, to which it refers mutatis mutandis, the Commission considers that this assertion is based on too broad an interpretation of the constitutional protection of the right of property. (b) The Commission takes the view, as it did in recital 134 of decision C 56/2007, to which it refers mutatis mutandis, that in the same way, when an EPIC is converted into a company that can be made the subject of court proceedings for administration or winding up, the right of property does not require that a specific measure be taken to preserve the entitlements of creditors, and that the fact that no such measure has been taken does not constitute evidence that there is no implied guarantee. (c) The Commission adds that, as explained in recitals 135 and 136 of decision C 56/2007, to which it refers mutatis mutandis, the fact that the French authorities decided to give an express guarantee to La Poste when it obtained a legal form equivalent to that of an EPIC in 1990 (80) does not mean that there was no implied guarantee before that date.

(106) Finally, as regards the article by Mr Labetoulle cited by the French authorities (81), and its analysis of the Campoloro case-law (82), the Commission refers to the part of the present decision relating to the liability of the State and to section 4.1.1 A(b)(3) of decision C 56/2007

(107) Contrary to the argument put forward by the French authorities, who contend that such a guarantee is excluded by the legislation, the Commission notes that the existence of implied guarantees arising out of the legal form of publicly owned establishments is confirmed by a memorandum of the Council of State drawn up in 1995 in the Crédit Lyonnais case, which took the view that the organisation concerned enjoyed an implied guarantee given by the State by reason merely of its character as a publicly owned establishment (83).

(108) As explained in recitals 142 to 145 of decision C 56/2007, to which it refers mutatis mutandis, the Commission does not share the interpretation put forward by the French authorities that this opinion of the Council of State cannot be transposed to the case of IFP. The opinion makes no reference to the aims of the establishment or to whether or not a public accountant is present within it. Moreover, the French authorities do not explain why, in their view, this opinion should apply to publicly owned establishments only if they have a public accountant. The Commission rejects the arguments put forward by the French authorities to the effect that the opinion is not applicable because it predates the Organic Law governing the Finance Act and is contrary to the subsequent case-law of the Council of State: in recital 104 above, and in decision C 56/2007, the Commission concluded that the Organic Law governing the Finance Act did not stand in the way of an implied guarantee given by the State to IFP.

(109) Finally, as indicated in recitals 146 and 147 of decision C 56/2007, to which it refers mutatis mutandis, the Commission notes the memorandum from the Minister for Economic Affairs, Finance and Industry dated 22 July 2003, concerning a ‘Census of implied and express guarantee arrangements granted by the State’, which confirms that there are implied State guarantees that derive from an administrative or legislative act which ‘produces and entails financial consequences for the State’. That memorandum shows that a State guarantee can derive from legal acts of very different kinds (84) and indicates that the setting up of a publicly owned establishment may entail an implied guarantee given by the State to the establishment’s creditors (85).

b) A creditor of IFP can be sure that his claim will be repaid.

(110) Following the example of the argument in section 4.1.1.A(b) of decision C 56/2007, to which it refers mutatis mutandis, the Commission will now set out to demonstrate that in the event of a default by IFP, its creditors would be in a more favourable position than that of creditors of an enterprise governed by commercial law.

(111) Firstly, in the case of publicly owned establishments, the conventional obstacles to the settlement of a claim against a body governed by private law are not applicable. On the basis of the factors detailed at greater length in recitals 150 to 154 of decision C 56/2007, to which it refers mutatis mutandis, the Commission concludes on this first point that: — unlike the creditors of undertakings governed by commercial law, creditors of IFP (which is not subject to the ordinary law governing the compulsory administration or winding up of firms in difficulty) are not in danger of seeing their claim cancelled in whole or in part as an outcome of compulsory winding-up proceedings; — the fact that IFP has legal personality is no bar to the existence of a guarantee given by the State; — in the absence of any express limitation on the State’s liability in respect of IFP, IFP’s creditors may legitimately act on the principle that the State will bear the debts of IFP, even though IFP possesses legal personality.

(112) Secondly, in the case of the recovery of the debts of a publicly owned establishment that has been found by a court to be in default, the procedure laid down in the Law of 16 July 1980 (and in implementing provisions (86)) is, for the reasons explained in recitals 113 to 117, more favourable to IFP’s creditors than insolvency proceedings in the courts under ordinary law, in so far as it is not liable to result in the cancellation of their claim on IFP.

(113) In accordance with the analysis developed in recitals 157 to 161 of decision C 56/2007, to which it refers mutatis mutandis, the Commission notes firstly that the Law of 1980 (87) and its implementing provisions (88) designate the State as the authority responsible for covering the debts of publicly owned establishments, and confer important prerogatives on the State: the mandatory payment order and the creation of sufficient resources.

(114) Following the example of the argument in recitals 162 to 168 of decision C 56/2007, to which it refers mutatis mutandis, the Commission considers that the specific procedure laid down by the Law of 1980 and the measures implementing it is a procedure only for the recovery of claims, and not for winding up, and that at the end of the procedure the claim is not cancelled, whereas at the end of winding-up proceedings under ordinary law a judgment terminating the proceedings on the ground that the assets are insufficient, without penalty, prevents creditors from pursuing the proceedings further. The Commission also notes that the Law of 1980 and the measures implementing it provide for the deferral of a payment order, and nowhere envisage a cessation of payments, and thereby give creditors to understand that there are or that there will be the resources necessary to settle a claim they hold on the public entity. These two factors lead to it consider that a shortage of funds will be covered, if necessary by the State, or is temporary only. But winding-up procedures never provide for the possibility that a third party can become liable for the debts of the insolvent party, except of course in the case of a guarantor.

(115) In accordance with the analysis developed in recitals 170 to 180 of decision C 56/2007, to which it refers mutatis mutandis, the Commission considers that in the event of a shortage of funds, French legislation authorises or indeed encourages the State to provide capital to publicly owned establishments, rather than expecting them to secure conventional bank loans; the ‘additional resources’ referred to in the Law of 16 July 1980 may consist of contributions of this kind. The Commission also considers that the relevant legislation is known to creditors, who consequently have good reason to believe that the supervising authority will be in a position to secure the resources necessary to ensure that their claims are satisfied. Consequently, the Commission takes the view that the probability that a creditor might not succeed in obtaining satisfaction of his claim under the procedures laid down by the Law of 16 July 1980 is low.

(116) However, contrary to the conclusion it drew in respect of La Poste in decision C 56/2007, the Commission observes that in this case the resources of its own that IFP would be able to mobilise are relatively high, since, as the French authorities have explained (see recital 44), available funds and investments at the end of 2007 (EUR 150,3 million) represented approximately five times the amount of borrowings and financial liabilities (EUR 25,2 million). Consequently, the Commission recognises that in its present financial position, it seems unlikely, at least in the near future, that a shortage of own resources could lead to IFP being unable to meet its debts and give rise to the need for State intervention.

(117) Although it is unlikely at present, it cannot be ruled out that IFP might experience such a shortage of assets in the longer term. In such circumstances, the fact that resources cannot be mobilised by selling assets means that use has to be made of other guarantee mechanisms (advances, efforts to establish a liability on the part of the State, etc.). Furthermore, in the event of a default on the part of IFP, the fact that the legislature has laid down rules protecting the assets might then be invoked in any dispute in which it was alleged that there was a strict liability resting on the State (89). On this point, the Commission takes note of the argument put forward by the French authorities (90) according to which even if the State considers an asset belonging to a publicly owned establishment to be ‘indispensable’ for the provision of a public service, and therefore objects to its sale, it is not bound to compensate via a guarantee mechanism. The Commission notes, however, that the French authorities have acknowledged that in applying the procedure laid down in the Law of 16 July 1980 the representative of the State is bound by the requirement of continuity of public service (although they deny that IFP can benefit as a result) (91). The Commission therefore considers that such a choice by the public authorities to prevent sales of assets in order to maintain a public service means that the State might incur strict liability for a breach of the principle of equality before public burdens.

(118) Thirdly, for the reasons already set out in recitals 185 to 226 of decision C 56/2007, to which it refers mutatis mutandis, the Commission considers that, in the unlikely event that the procedure laid down by the Law of 16 July 1980 does not result in payment of creditors, the courses still open to them to render the State liable have the characteristics of a guarantee mechanism.

(119) Although the French authorities consider that the State has in principle no liability, whether for a fault on its part or in the absence of any such fault (92), they acknowledge that, if there is a requirement of continuity of public service that is binding on the representative of the State in the procedure laid down by the Law of 16 July 1980, a court may order that the creditor be compensated. But in that event the French authorities consider that the creditor is not given any advantage, as the compensation he receives is comparable to that which he would have received under ordinary law. The Commission draws attention, however, to certain specific features of the special scheme introduced by the Law of 1980: under the ordinary law governing compulsory winding up, creditors (and especially unsecured creditors) will not as a general rule recover the whole of their claims, and the enterprise being wound up will not usually have its debts paid by a third party.

(120) The French authorities also further deny that any possibility of compensation of creditors that may be opened up if the State is held liable can be considered equivalent to a guarantee. The Commission takes the view, however, that, in the procedure for the recovery of the debts of the public bodies referred to in the Law of 16 July 1980, the liability of the State, with or without fault, is indeed equivalent to a guarantee mechanism for purposes of European Union law, because it ensures creditors that if IFP should default the State will be required to meet their claims. The judgment of the European Court of Human Rights (‘ECHR’) in Société de gestion du port de Campoloro et Société fermière de Campoloro v France (93) (the Campoloro case) also points to the existence of an automatic guarantee.

(121) Finally, as shown in recitals 181 to 184 of decision C 56/2007, to which it refers mutatis mutandis, the Commission considers that the French authorities’ proposal for a clarification of the Decree implementing the Law of 1980 is not sufficient to prevent an increase in resources from being achieved by an injection of public funds. (a) The French authorities propose to amend the Decree implementing the Law of 1980 as follows (the amendment is shown in italic): ‘If the notice given has had no effect by the time these deadlines expire, the representative of the State or the authority responsible for supervision shall enter the expenditure in the budget of the defaulting authority or publicly owned establishment. The representative of the State or the authority responsible for supervision shall, as appropriate, release the necessary resources from the budget of the defaulting authority or establishment either by reducing the appropriations allocated to other expenditures and still available or by increasing resources’. (b) However, as the Commission pointed out in recital 67 of the opening decision, neither in its present wording nor in the amended wording proposed by the French authorities does the legislation prevent an increase in resources from being made possible by a subsidy or injection of public funds.

(122) For the reasons already set out in recitals 204 to 211 of decision C 56/2007, to which it refers mutatis mutandis, the Commission also considers that the EHCR’s judgment in the Campoloro case demonstrates that, in this instance, the liability accepted by the French State operates as an implied guarantee of the public authorities’ liabilities and is not linked to any condition relating to injury. (a) The Commission notes more specifically that the ECHR rejected the arguments of the French authorities which attempted to base their case (94) on the absence of, firstly, an operative event imputable to the State and, secondly, a guarantee on the part of the State to public authorities possessing legal personality, and accepted the contrary arguments of the applicants (95). (b) The ECHR found that there had been a breach of Article 6-1 of the European Convention on Human Rights (‘the Convention’), and added that the judgments had to be implemented and that a State authority could not use lack of resources as a pretext for not honouring a debt based on a judicial decision. The ECHR also found that there had been a breach of Article 1 of Protocol No 1 to the Convention, the applicants having suffered interference with their property rights on account of a huge and special burden due to the non-payment of the sums which they should have received (96). In the light of the above, the ECHR charged the whole of the debtor communes’ debt to the State (97). (c) The Commission considers that this judgment has three important implications: — Subject to the applicants obtaining a court judgment recognising their claim, the liability of the State functions as an implied guarantee (98), in so far as the French State is required to pay the whole of the debt of the public body (99) and no distinction is made between debt conceivably due to the public authority’s insolvency and possible defaults imputable to the State (the ECHR did not at any time seek to identify an act or omission imputable to the State, and looked no further than the debtor’s insolvent status). — This liability covers the debts of public authorities possessed, however, of legal personality. The existence of legal personality and of assets specific to the authority was expressly invoked by the French Government in its opposition to holding the French State liable, but this argument was rejected by the ECHR. — The scope of the State guarantee extends to include public authorities dependent on the State. The guarantee is therefore intrinsically connected with the debtor’s public-law legal form. (d) Moreover, the Commission notes that the solution adopted by the ECHR in the Campoloro case is not an isolated one and stems from a well established line of case-law, notably in the judgments in the cases Artico v Italy (100) and Bourdov v Russia (101).

(123) For the reasons already set out in recitals 212 to 220 of decision C 56/2007, to which it refers mutatis mutandis, the Commission considers that the observations made by the French authorities are not of a nature to invalidate this reasoning. As it argued in the postal case, in recital 222 of decision C 56/2007, and in the opening decision, the Commission concludes that, as French law currently stands, a creditor of IFP who has not obtained the payment of his claim by recourse to the procedures introduced by the Law of 16 July 1980 may receive all of the sums corresponding to the unmet claim by invoking the State’s last-resort liability. This is the opposite of what happens within the framework of winding-up proceedings under ordinary law, where the reimbursement of the creditor is limited by the value of the available assets. In consequence of the above, the Commission considers that the State’s liability is treated as a guarantee, it is not the subject of any limitation by French legislation, and is intrinsically linked to the public-law legal form possessed by the debtor body.

(124) Furthermore, for the reasons already set out in recitals 223 to 226 of decision C 56/2007, to which it refers mutatis mutandis, the Commission takes note of the French proposal to include a clause in all IFP contracts involving claims so as to limit any risk of triggering the State’s strict liability based on IFP’s insolvency alone. It considers that such a legal framework would remain fragile and that there are doubts about its durability, because the plea of accepted risk is a rule established by case-law, which could always evolve. The Commission considers, however, that such a proposal is inherently inadequate as it does not cover all eventualities: it would not mean that the State guarantee could never come into play for any type of liability (in particular non-contractual liability and criminal liability). Moreover, it is impossible to make it contractually clear to its debtors that the State will not be liable for IFP’s debts, as IFP may find itself indebted towards a third party through a variety of judicial mechanisms, in particular if it were to absorb another entity holding claims by initially unidentifiable third parties (102). Ultimately, as regards the individual claims held by third parties, the Commission considers that only a text of general scope applicable in any situation and to any type of third party, indicating that the State is not the guarantor of IFP, would be enough to eliminate the unlimited guarantee. In addition, even if the French proposals were to make it quite impossible for a creditor of IFP to hold the State liable for paying its claim (something which in the Commission’s view has not been shown), such proposals would not enable it to be clearly established what would happen in the event of IFP becoming insolvent (103).

(125) Fourthly, even if he were to fail obtain satisfaction, the creditor of a publicly owned establishment could invoke legal effects arising from a legitimate mistake he made at the time the claim arose, when he believed that the claim would always be honoured.

(126) For the reasons already set out in recitals 227, 228 (first to third indents) and 229 of decision C 56/2007, to which it refers mutatis mutandis, the Commission believes that the theory of appearance (104) provides confirmation that the creditors of IFP would be justified in believing, on the basis of a body of consistent evidence, that such a guarantee does indeed exist (even assuming, quod non, that the fact that IFP has the legal form of an EPIC is not of a nature to confer on it, in law, an unlimited guarantee given by the French State). The main relevant indices in relation to the theory of appearance derive firstly from the fact that a variety of legislative instruments (Law of 16 July 1980 and the measures implementing it) or official (budgetary) documents lead the creditor to believe that the State would take over EPICs’ debts in the event of their having a shortage of funds or that it would assume liability for those debts; secondly from the fact that the lack of clarification by the French authorities of the legal situation following the Campoloro case and of the initial proceedings undertaken by the Commission on the legal form of EPICs also increases creditors’ confidence that such a guarantee does in fact exist; and finally from the fact that the lack of any clear indication as to the effects of a situation in which an EPIC is in default also militates in favour of this view.

(127) In the present case, the Commission wishes to add that prior to 7 July 2006, any creditors of the publicly owned establishment IFP were in a contractual relationship with a trade body within the meaning of Law No 43-612 of 17 November 1943 on the management of trade interests, a body which was a legal person governed by private law, and which they had no reason to think could be covered by a State guarantee of any kind. Consequently, the theory of appearance can in any event be applied only with regard to claims arising after the change of status of the publicly owned establishment IFP.

(128) Following the conclusions of its expert in the postal case, the Commission has arrived at the view that, as regards claims arising after 7 July 2006, even if, in the scenario championed by the French authorities, it was in error that a creditor came to consider that the State was required to guarantee the debts of publicly owned establishments and of IFP in particular, his error would be legitimate given the above-mentioned factors, and the law could impart effects to it. If, exceptionally, the creditor did not succeed in obtaining the payment of his claim, he could nevertheless rest assured that there was no likelihood of the claim being cancelled.

B. Guarantee of the continued existence of IFP and/or of its obligations

(129) For the reasons already set out in recitals 230 to 250 of decision C 56/2007, to which it refers mutatis mutandis, the Commission considers that even if, within a reasonable period and after the use of the procedures described in the previous section, the creditor of an EPIC does not succeed in obtaining the payment of his claim, he will be secure in the knowledge that the claim will not be cancelled, in contrast to the situation of a creditor of a company constituted under private law in liquidation, who has no guarantee that his claim will have to be met.

(130) The Commission stresses that there is no public authority-motivated winding up/closing down of publicly owned establishments in which the rights and obligations of the establishments are also cancelled: in the event of publicly owned establishments being closed down by decision of a public authority – and despite the fact that no legislation expressly provides for this – experience and certain basic principles of administrative law tend to show that the rights and obligations of publicly owned establishments that are closed down as such are always taken over by another body and, failing that, by the State. In other words, the debts of publicly owned establishments are always transferred to another legal person, which cannot refuse them, so that each creditor can therefore be certain that the right arising from his claim may be invoked against another body and that his claim will not, therefore, be cancelled.

(131) The Commission refers to the detail of the analysis presented in recitals 233 to 250 of decision C 56/2007, based on the study carried out by its expert in the postal case on organic developments affecting publicly owned establishments, which identifies three reasons why publicly owned es