Order of the Court (Sixth Chamber) of 27 November 2001. - Portuguese Republic v Commission of the European Communities. - EAGGF, Guidance Section - Commission decision cancelling financial assistance granted under Article 8 of Regulation (EEC) No 4256/88 - Action for partial annulment on grounds of the designation of a Member State as addressee - Manifest inadmissibility. - Case C-208/99.



European Court reports 2001 Page I-09183



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

Actions for annulment - Actionable measures - Acts having legal effects - Designation of a Member State, alongside the undertakings concerned, as addressee of Commission decisions cancelling financial assistance under the EAGGF - Action brought by that State against its designation - Inadmissible

(Ec Treaty, Art. 192 (now Art. 256 EC); Art. 230 EC; Council Regulations No 4253/88, Arts.23 and 24, and No 2082/93)

Summary

$$An action for an annulment brought by a Member State against its designation, alongside the undertakings concerned, as addressee of Commission decisions cancelling financial assistance under the EAGGF must in the case in point be declared manifestly inadmissible.

In order for an act of the Commission to be the subject of an action for annulment, it must be intended to have legal effects even where, in the event that it is a Member State which intends to bring such an action, those effects are not to deploy with regard to the Member State itself. In that regard, the designation of that State in those decisions clearly has no autonomous legal effect.

First, the obligations on that State concerning the enforcement of the decisions in question and appending of enforcement orders derive directly from Article 192 of the Treaty (now Article 256 EC) and those obligations are not affected by the fact that the contested decisions are addressed to that State. Secondly, the decisions do not relate to the question of the possible liability of that State or any obligations which it may have under Articles 23 and 24 of Regulation No 4253/88 laying down provisions for implementing Regulation No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments, as amended by Regulation No 2082/93, which contain rules on financial control and on the reduction, suspension and cancellation of assistance.

( see paras 24-28 )

Parties

In Case C-208/99,

Portuguese Republic, represented by L. Fernandes, A. Cortesão de Seiça Neves and P. Fragão, acting as Agents, with an address for service in Luxembourg,

applicant,

v

Commission of the European Communities, represented by A.M. Alves Vieira and P. Oliver, acting as Agents, with an address for service in Luxembourg,

defendant,

APPLICATION for the partial annulment of Commission Decisions Nos C (1999) 543, C (1999) 544 and C (1999) 545 of 4 March 1999 cancelling assistance granted to the companies Belgravia L.da, Floreurop - Produtos Florestais L.da and Ordinal - Gestão de Investimentos L.da, respectively, under the Guidance Section of the European Agricultural Guidance and Guarantee Fund (EAGGF),

THE COURT (Sixth Chamber),

composed of: F. Macken, President of the Chamber, N. Colneric, C. Gulmann, J.-P. Puissochet (Rapporteur) and V. Skouris, Judges,

Advocate General: A. Tizzano,

Registrar: R. Grass,

after hearing the Opinion of the Advocate General,

makes the following

Order

Grounds

1 By application lodged at the Court Registry on 1 June 1999, the Portuguese Republic sought partial annulment of Commission Decisions Nos C (1999) 543, C (1999) 544 and C (1999) 545 of 4 March 1999 cancelling assistance granted to the companies Belgravia L.da, Floreurop - Produtos Florestais L.da and Ordinal - Gestão de Investimentos L.da, respectively, under the Guidance Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) (hereinafter the contested decisions).

2 The action brought by the Portuguese Republic seeks the annulment of the contested decisions in so far as they are addressed to the Portuguese Republic besides the undertakings concerned.

Legal context

Community law

3 Article 192 of the EC Treaty (now Article 256 EC) provides:

Decisions of the Council or of the Commission which impose a pecuniary obligation on persons other than States, shall be enforceable.

Enforcement shall be governed by the rules of civil procedure in force in the State in the territory of which it is carried out. The order for its enforcement shall be appended to the decision, without other formality than verification of the authenticity of the decision, by the national authority which the government of each Member State shall designate for this purpose and shall make known to the Commission and to the Court of Justice.

When these formalities have been completed on application by the party concerned, the latter may proceed to enforcement in accordance with the national law, by bringing the matter directly before the competent authority.

Enforcement may be suspended only by a decision of the Court of Justice. However, the courts of the country concerned shall have jurisdiction over complaints that enforcement is being carried out in an irregular manner.

4 The tasks and procedures for intervention under the EAGGF are defined in Council Regulation (EEC) No 2052/88 of 24 June 1988 on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 185, p. 9) and by Council Regulation (EEC) No 4256/88 of 19 December 1988 laying down provisions for implementing Regulation (EEC) No 2052/88 as regards the EAGGF Guidance Section (OJ 1988 L 374, p. 25). These regulations have been modified by Council Regulation (EEC) No 2081/93 of 20 July 1993 (OJ 1993 L 193, p. 5) and by Council Regulation (EEC) No 2085/93 of 20 July 1993 (OJ 1993 L 193, p. 44) respectively. The interventions of the EAGGF Guidance Section concern in particular the reinforcement and reorganisation of agricultural structures as well as the reconversion of agricultural production and the promotion of complementary development activities for farmers.

5 Council Regulation (EEC) No 4253/88 of 19 December 1988 laying down provisions implementing Regulation (EEC) 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 374, p. 1), as amended by Council Regulation (EEC) No 2082/93 of 20 July 1993 (OJ 1993 L 193, p. 20, hereinafter Regulation No 4253/88), contains, in Articles 23 and 24, which appear in Title VI on financial provisions, rules on financial control and on the reduction, suspension and cancellation of assistance.

National law

6 The Portuguese Law No 104/88 of 31 August 1998 (Diário da República, First Series, No 201 of 31 August 1988) implements Article 192 of the Treaty. It provides:

Article 1

The Minister for Foreign Affairs shall check the authenticity of documents giving effect in Portugal to decisions authorising the execution of measures implementing the Treaties establishing the European Communities and the convention concerning certain institutions common to that Community and which, according to the Treaties, qualify for enforcement.

Article 2

1. Documents that have been checked and authenticated in accordance with the above article, shall be transmitted by the Minister for Justice to the Tribunal da Relaçaõ of the legal district in which the defendant is domiciled and the President of the latter shall append the enforcement order.

...

Article 3

The implementing action shall be governed by the relevant rules of the Civil Procedure Code and in territorial terms the court of first instance designated thereunder shall be competent for such action.

Background to the case

7 By Decision No C (93) 1606 of 21 June 1993, the Commission granted assistance under Article 8 of Regulation No 4256/88 to the company Ordinal - Gestão de Investimentos L.da, for a total maximum amount of ECU 710 160 for a Pilot and demonstration project for promoting three Mediterranean plants (fennel, balm and parsley) through the extraction of essential oils for the agro-food industry.

8 By Decision No C (93) 3403 of 26 November 1993, the Commission granted assistance of the same nature to Belgravia L.da, for a maximum amount of ECU 972 342 for a Demonstration project for the introduction of the cultivation of sea kale.

9 By Decision No C (96) 2211 of 13 September 1996, the Commission granted assistance of the same nature to Floreurop - Produtos Florestais L.da, for a maximum amount of ECU 748 468 for a Demonstration project to accelerate agricultural diversification in Madeira by introducing products intended for the pharmaceutical industry (tea tree oil).

10 During on-the-spot checks carried out from 26 May to 5 June 1997 in the three undertakings benefiting from the assistance and having held a preparatory meeting with the Portuguese General Inspectorate of Finance, Commission officials found numerous irregularities.

11 Following those checks the Commission sent a letter to all three undertakings concerned, together with a draft decision to cancel Community assistance already granted and requesting comments. The Portuguese authorities received a copy of those letters together with a note mentioning that they could submit their observations.

12 None of the said companies provided observations within the prescribed time-limit.

13 As for the Portuguese authorities, they considered that no fact or legal consideration could implicate their liability or obligations and decided that it was not necessary or expedient to submit observations. However, following the checks carried out by the Commission, the Portuguese authorities themselves carried out various controls, notably of a fiscal nature, with regard to the undertakings concerned.

14 On 4 March 1999, on the basis of Article 24(2) of Regulation No 4253/88, the Commission adopted the contested decisions cancelling the assistance previously granted to the three undertakings concerned and ordering the repayment of amounts already paid. Belgravia L.da and Ordinal - Gestão de Investimentos L.da, and, where appropriate, the persons legally liable for their debts, have thus been summoned to repay EUR 680 640 and EUR 710 160 respectively. As no payment was made to Floreurop - Produtos Florestais L.da, no repayment has been demanded of it.

15 The contested decisions are addressed to the Portuguese Republic as well as to the undertakings concerned. At the time of notification of the decisions to the Portuguese authorities, the Commission requested the Portuguese Minister for Foreign Affairs, under separate cover, to apply implementing measures and send copies thereof to the Commission.

The action

16 By this action the Portuguese Republic seeks partial annulment of the contested decisions in so far as the Portuguese Republic is designated an addressee in them.

17 The Portuguese Government relies on two pleas. Firstly, it claims that the contested decisions lack adequate reasoning to the extent that they are addressed to it, contrary to Article 190 of the EC Treaty (now Article 253 EC). Secondly, it argues that the contested decisions contravene Article 23(1), third subparagraph, and Article 24 of Regulation No 4253/88 to the extent that they are addressed to the Portuguese Republic when it bears no liability for the repayment of the assistance in question, taking into account the fact that the initiative to grant and control this funding is a matter for the Commission alone. The Portuguese Government also notes that its obligation under Article 192 of the Treaty to append an enforcement order to the contested decisions is entirely independent of its designation as addressee of those decisions.

18 The Portuguese Government also argues that, under Article 230 EC and because of its status as a privileged applicant, the Portuguese Republic need not prove its legal interest in bringing proceedings for an action for annulment and contests those measures formally designating it as addressee.

Admissibility of the action

19 Without formally raising a preliminary issue under Article 91 of the Rules of Procedure and without questioning the status of the Portuguese Republic as a privileged applicant, the Commission casts doubt on its legal interest in bringing proceedings or its procedural interest and contends, as a primary submission, that the action is inadmissible. According to the Commission, the contested decisions must have legal effects with respect to the Portuguese Republic in order for it to be entitled to request annulment of its designation as addressee of the contested decisions.

20 That is not the case, as the Commission explains in its argument on the merits of the action. The Commission agrees with the Portuguese Government that the funding in question and its monitoring is the responsibility of the Commission alone, without involving that of the Member State. Since the Portuguese Government has itself claimed that Articles 23 and 24 of Regulation No 4253/88 do not impose any obligation on it, the Portuguese Republic, the Commission contends, has no procedural interest in the action. The Portuguese Republic was designated as addressee of the contested decisions for practical reasons, given the need to append enforcement orders to the contested decisions and to inform the Portuguese authorities of the action taken in a case which they had already been following as spectators. That designation was therefore in no way contrary to Articles 23 and 24 of Regulation No 4253/88.

21 According to Article 92(1) of the Rules of Procedure, where the Court clearly has no jurisdiction to take cognisance of an action or where the action is manifestly inadmissible, the Court may, by reasoned order, after hearing the Advocate General and without taking further steps in the proceedings, give a decision in the action.

22 Article 230 EC does draw a clear distinction between the right of Community institutions and Member States to bring an action for annulment and that of legal persons and individuals, in that the second paragraph of Article 230 EC gives all Member States the right to contest the legality of decisions of the Commission by means of an action for annulment without having to establish any legal interest in bringing proceedings (see, in particular, to that effect, Case 131/86 United Kingdom v Council [1988] ECR 905, paragraph 6).

23 A Member State need not therefore prove that an act of the Commission which it is contesting produces legal effects with regard to that Member State in order for its action to be admissible.

24 However, in order for an act of the Commission to be the subject of an action for annulment, it must be intended to have legal effects (see, inter alia, Case 114/86 United Kingdom v Commission [1988] ECR 5289, paragraph 12; Case C-57/95 France v Commission [1997] ECR I-1627, paragraph 7, and Case C-443/97 Spain v Commission [2000] ECR I-2415, paragraphs 27 and 28), even where, in the event that it is a Member State which intends to bring such an action, those effects are not to deploy with regard to the Member State itself.

25 In this instance, the Portuguese Republic has requested annulment of the contested decisions only in so far as they designate the Portuguese Republic as addressee. However, that designation clearly has no autonomous legal effect.

26 First, the obligations on the Portuguese Republic concerning the enforcement of the contested decisions and appending of enforcement orders derive directly from Article 192 of the Treaty and those obligations are not affected by the fact that the contested decisions are addressed to the Portuguese Republic. Numerous Commission decisions placing financial obligations upon persons other that the Member States, such as decisions imposing fines under the competition rules, do not designate, as addressee, the Member State in which those persons are established. Equally, in this case, the Commission in any event requested the Portuguese authorities, by separate letter, to append enforcement orders and those authorities could be perfectly well informed of developments in the case without the contested decisions having been expressly addressed to the Portuguese Republic.

27 Secondly, without its being necessary to rule on the question of the liability or obligations of the Portuguese Republic under Articles 23 and 24 of Regulation 4253/88 in this case, the fact remains that the contested decisions do not relate to this question and that if the Commission intended to establish such liability or such obligations, it ought to do so by means of other decisions addressed to the Portuguese Republic.

28 The designation of the Portuguese Republic as addressee in the contested decisions thus appears superfluous and to have no independent legal effect. Consequently, the action must be declared manifestly inadmissible.

Decision on costs

Costs

29 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if the successful party applied for them in its pleadings. The Commission has requested that the Portuguese Republic be ordered to pay the costs and the latter has been unsuccessful. However, under Article 69(3) of the Rules of Procedure, in exceptional circumstances the Court may order each party to bear its own costs.

30 In the present case, the Portuguese Republic was encouraged to bring this action because the contested decisions were addressed to it unnecessarily, which could have misled it about the full significance of that designation. Each party must therefore be ordered to bear its own costs.

Operative part

On those grounds,

THE COURT (Sixth Chamber)

hereby:

1. Dismisses the action as manifestly inadmissible;

2. Orders each party to bear its own costs.