Judgment of the Court of 3 March 1988. - Commission of the European Communities v Board of Governors of the European Investment Bank. - Tax withheld from the salaries and pensions of staff of the European Investment Bank. - Case 85/86.



European Court reports 1988 Page 01281



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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PRIVILEGES AND IMMUNITIES OF THE EUROPEAN COMMUNITIES - OFFICIALS AND OTHER SERVANTS OF THE COMMUNITIES - COMMUNITY TAX ON SALARIES PAID BY THE EUROPEAN INVESTMENT BANK - LEVIED FOR THE BENEFIT OF THE COMMUNITIES

( EEC TREATY, ART . 130; PROTOCOL ON THE PRIVILEGES AND IMMUNITIES OF THE EUROPEAN COMMUNITIES, ARTS 13 AND 22; COUNCIL REGULATION NO 260/68 )

Summary

IN THE INTERESTS OF THE COMMUNITIES' INDEPENDENCE AND EQUAL TREATMENT OF THEIR OFFICIALS AND OTHER SERVANTS ARTICLE 13 OF THE PROTOCOL ON THE PRIVILEGES AND IMMUNITIES OF THE EUROPEAN COMMUNITIES IS TO REPLACE NATIONAL TAXES BY A COMMUNITY TAX WHICH IS APPLICABLE TO THE COMMUNITIES' STAFF ON THE BASIS OF UNIFORM CONDITIONS . IT DOES NOT FOLLOW FROM THAT PROVISION, WHICH IS APPLICABLE TO THE STAFF OF THE EUROPEAN INVESTMENT BANK BY VIRTUE OF ARTICLE 22 OF THE PROTOCOL, THAT THE PROCEEDS OF THE COMMUNITY TAX SHOULD BE ALLOTTED TO THE BODIES IN WHICH THE STAFF CONCERNED ARE EMPLOYED .

SINCE THE RIGHTS AND PRIVILEGES ARISING OUT OF THE PROTOCOL WERE CONFERRED ON THE EUROPEAN INVESTMENT BANK ONLY IN ITS CAPACITY AS A BODY WHICH, ACCORDING TO ARTICLE 130 OF THE TREATY, ACTS IN THE INTEREST OF THE COMMUNITIES, ARTICLES 13 AND 22 OF THE PROTOCOL MUST BE INTERPRETED AS MEANING THAT THE TAX ON SALARIES PAID BY THAT BODY IS LEVIED FOR THE BENEFIT OF THE COMMUNITIES IN ACCORDANCE WITH THE CONDITIONS AND PROCEDURE LAID DOWN BY THE COUNCIL IN REGULATION NO 260/68 . THE BANK' S OPERATIONAL AND INSTITUTIONAL AUTONOMY DOES NOT MEAN THAT IT IS TOTALLY SEPARATED FROM THE COMMUNITIES AND EXEMPT FROM EVERY RULE OF COMMUNITY LAW, SINCE IT IS CLEAR IN PARTICULAR FROM ARTICLE 130 OF THE TREATY THAT THE BANK IS INTENDED TO CONTRIBUTE TOWARDS THE ATTAINMENT OF THE COMMUNITY' S OBJECTIVES AND FORMS PART OF THE FRAMEWORK OF THE COMMUNITY .

Parties

IN CASE 85/86

COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY BERNARD PAULIN, PRINCIPAL ADVISER, AND HENDRIK VAN LIER, A MEMBER OF ITS LEGAL DEPARTMENT, ACTING AS AGENTS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF G . KREMLIS, ALSO A MEMBER OF ITS LEGAL DEPARTMENT, JEAN MONNET BUILDING, KIRCHBERG,

APPLICANT,

V

BOARD OF GOVERNORS OF THE EUROPEAN INVESTMENT BANK, REPRESENTED BY JOERG KAESER, MANAGER OF THE LEGAL DIRECTORATE OF THE BANK, ACTING AS AGENT, ASSISTED BY MICHEL WAELBROECK, OF THE BRUSSELS BAR, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE SECRETARIAT OF THE BOARD OF GOVERNORS OF THE BANK, 100 BOULEVARD KONRAD ADENAUER,

DEFENDANT,

APPLICATION FOR A DECLARATION THAT THE DECISION OF THE BOARD OF GOVERNORS OF THE EUROPEAN INVESTMENT BANK OF 30 DECEMBER 1985 ON THE DISPOSAL OF THE PROCEEDS OF THE INCOME TAX WITHHELD BY THE BANK FROM SALARIES AND PENSIONS PAID TO ITS STAFF IS VOID,

THE COURT

COMPOSED OF : G . BOSCO, PRESIDENT OF CHAMBER, ACTING AS PRESIDENT OF THE COURT, J.C . MOITINHO DE ALMEIDA AND G.C . RODRIGUEZ IGLESIAS ( PRESIDENTS OF CHAMBERS ), T . KOOPMANS, U . EVERLING, K . BAHLMANN, Y . GALMOT, C . KAKOURIS, R . JOLIET, T.F . O' HIGGINS AND F . SCHOCKWEILER, JUDGES,

ADVOCATE GENERAL : G.F . MANCINI

REGISTRAR : D . LOUTERMAN, ADMINISTRATOR

HAVING REGARD TO THE REPORT FOR THE HEARING AND FURTHER TO THE HEARING ON 18 JUNE 1987,

AFTER HEARING THE OPINION OF THE ADVOCATE GENERAL DELIVERED AT THE SITTING ON 24 NOVEMBER 1987,

GIVES THE FOLLOWING

JUDGMENT

Grounds

1 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 21 MARCH 1986, THE COMMISSION OF THE EUROPEAN COMMUNITIES BROUGHT AN ACTION UNDER ARTICLE 180 ( B ) AND ARTICLE 173 OF THE EEC TREATY FOR A DECLARATION THAT THE DECISION OF THE BOARD OF GOVERNORS OF THE EUROPEAN INVESTMENT BANK ( HEREINAFTER REFERRED TO AS "THE BOARD OF GOVERNORS ") OF 30 DECEMBER 1985 ON THE DISPOSAL OF THE PROCEEDS OF THE INCOME TAX WITHHELD BY THE BANK FROM SALARIES AND PENSIONS PAID TO ITS STAFF IS VOID .

2 THE PROCEEDINGS ARISE FROM A DISAGREEMENT BETWEEN THE PARTIES CONCERNING THE APPLICATION OF THE PROVISIONS OF THE PROTOCOL ON THE PRIVILEGES AND IMMUNITIES OF THE EUROPEAN COMMUNITIES OF 8 APRIL 1965 ( JOURNAL OFFICIEL 1967 152, P . 13 ) (" THE PROTOCOL ") AS REGARDS THE TAX ON THE REMUNERATION OF STAFF OF THE COMMUNITIES AND THE APPLICATION OF THAT TAX TO STAFF OF THE EUROPEAN INVESTMENT BANK (" THE BANK ").

3 THE FIRST PARAGRAPH OF ARTICLE 13 OF THE PROTOCOL PROVIDES AS FOLLOWS :

" OFFICIALS AND OTHER SERVANTS OF THE COMMUNITIES SHALL BE LIABLE TO A TAX FOR THE BENEFIT OF THE COMMUNITIES ON SALARIES, WAGES AND EMOLUMENTS PAID TO THEM BY THE COMMUNITIES, IN ACCORDANCE WITH THE CONDITIONS AND PROCEDURE LAID DOWN BY THE COUNCIL, ACTING ON A PROPOSAL FROM THE COMMISSION ".

ARTICLE 22 PROVIDES THAT :

" THIS PROTOCOL SHALL ALSO APPLY TO THE EUROPEAN INVESTMENT BANK, TO THE MEMBERS OF ITS ORGANS, TO ITS STAFF AND TO THE REPRESENTATIVES OF THE MEMBER STATES TAKING PART IN ITS ACTIVITIES, WITHOUT PREJUDICE TO THE PROVISIONS OF THE PROTOCOL ON THE STATUTE OF THE BANK ".

4 PURSUANT TO ARTICLE 13 OF THE PROTOCOL, THE COUNCIL OF THE EUROPEAN COMMUNITIES ADOPTED REGULATION NO 260/68 OF 29 FEBRUARY 1968 LAYING DOWN THE CONDITIONS AND PROCEDURE FOR APPLYING THE TAX FOR THE BENEFIT OF THE EUROPEAN COMMUNITIES ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1968 ( I ), P . 37 . ARTICLE 9 OF THAT REGULATION PROVIDES THAT THE PROCEEDS OF THE TAX ARE TO BE ENTERED AS REVENUE IN THE BUDGETS OF THE COMMUNITIES . ACCORDING TO ARTICLE 12, THE REGULATION IS TO APPLY TO MEMBERS OF THE ORGANS OF THE BANK, AND TO MEMBERS OF ITS STAFF AND RECIPIENTS OF THE PENSIONS IT PAYS, WITH REGARD TO SALARIES, WAGES, EMOLUMENTS AND PENSIONS .

5 THE AFOREMENTIONED PROVISIONS REPLACE THE CORRESPONDING ARTICLES OF THE PROTOCOL OF 17 APRIL 1957 ON THE PRIVILEGES AND IMMUNITIES OF THE EUROPEAN ECONOMIC COMMUNITY AND OF COUNCIL REGULATION NO 32/61/EEC AND 12/61/EAEC OF 18 DECEMBER 1961 ( JOURNAL OFFICIEL 1962, P . 1461 ), THE CONTENT OF WHICH WAS IDENTICAL .

6 SINCE 1962 THE BANK HAS WITHHELD THE AFORESAID TAX FROM THE SALARIES, WAGES, PENSIONS AND EMOLUMENTS WHICH IT PAYS TO ITS STAFF AND EACH YEAR HAS ENTERED THE SUMS DEDUCTED ON THE LIABILITIES SIDE OF ITS BALANCE SHEET UNDER THE HEADING "MISCELLANEOUS ".

7 SINCE THE 1960S THE COMMISSION HAD REPEATEDLY MADE IT CLEAR IN CONTACTS WITH REPRESENTATIVES OF THE BANK THAT IT INTENDED TO ASSERT THE COMMUNITIES' RIGHTS . BETWEEN 1981 AND 1985 IT MADE VARIOUS APPROACHES TO THE BOARD OF GOVERNORS WITH A VIEW TO SECURING PAYMENT OF THE SUMS WITHHELD INTO THE GENERAL BUDGET OF THE COMMUNITIES . ITS APPROACHES WERE UNSUCCESSFUL .

8 ON 30 DECEMBER 1985 THE BOARD OF GOVERNORS ADOPTED THE CONTESTED DECISION PROVIDING THAT THE PROCEEDS OF THE TAX WITHHELD BY THE BANK UP UNTIL THE END OF 1985 AND ENTERED ON THE LIABILITIES SIDE OF ITS BALANCE SHEET WERE TO BE TRANSFERRED TO THE RESERVES . THE DECISION FURTHER PROVIDED THAT AS FROM THE 1986 FINANCIAL YEAR AMOUNTS WITHHELD BY THE BANK FROM SALARIES, WAGES, PENSIONS AND EMOLUMENTS PAID BY THE BANK WERE TO BE ACCOUNTED FOR AS BANK INCOME AND ENTERED AS SUCH ON THE PROFIT AND LOSS ACCOUNT .

9 REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR A FULLER ACCOUNT OF THE FACTS OF THE CASE, THE PROCEDURE AND THE SUBMISSIONS AND ARGUMENTS OF THE PARTIES, WHICH ARE MENTIONED OR DISCUSSED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF THE COURT .

ADMISSIBILITY

10 SINCE THE COMMISSION' S ACTION WAS BROUGHT AGAINST THE BANK AND NOT AGAINST THE BANK' S BOARD OF GOVERNORS AS PROVIDED FOR IN ARTICLE 180 ( B ) OF THE TREATY, THE BANK RAISED AN OBJECTION OF INADMISSIBILITY UNDER ARTICLE 91 OF THE RULES OF PROCEDURE ON THE GROUND THAT THE APPLICATION DID NOT COMPLY WITH THE CONDITIONS OF ARTICLE 38 OF THOSE RULES IN SO FAR AS IT DID NOT NAME THE RIGHT DEFENDANT .

11 BY ORDER OF 3 JULY 1986 THE COURT REJECTED THAT OBJECTION OF INADMISSIBILITY ON THE GROUND THAT IT WAS CLEAR FROM THE ACTUAL WORDING OF THE APPLICATION THAT IT WAS DIRECTED AGAINST THE BOARD OF GOVERNORS AS THE RELEVANT ORGAN OF THE BANK .

12 THE BOARD OF GOVERNORS FURTHER ARGUES THAT THE APPLICATION IS INADMISSIBLE ON THE GROUND THAT THE COMMISSION HAS NO INTEREST IN BRINGING THE ACTION SINCE IT IS DIRECTED AGAINST AN ACT WHICH DOES NOT ADVERSELY AFFECT THE COMMISSION AND WHICH HAS NO LEGAL EFFECTS AS FAR AS THIRD PARTIES ARE CONCERNED .

13 IN THAT REGARD IT IS SUFFICIENT TO OBSERVE THAT THE CONTESTED DECISION OF THE BOARD OF GOVERNORS DEFINITIVELY TO TRANSFER TO THE BANK' S RESERVES THE TAX PROCEEDS WITHHELD UP UNTIL THE END OF 1985 MIGHT AFFECT THE COMMISSION' S RIGHTS SINCE IT CONSTITUTES AN IMPLIED REJECTION OF ITS REQUEST THAT THOSE AMOUNTS BE PAID INTO THE COMMUNITIES' BUDGET, WHICH THE COMMISSION IS RESPONSIBLE FOR ADMINISTERING .

14 LASTLY, THE BOARD OF GOVERNORS ARGUES THAT THE COMMISSION CANNOT CLAIM TO RECOVER THE PROCEEDS OF THE TAX IN QUESTION WITHOUT THOSE PROCEEDS FIRST HAVING BEEN ENTERED IN THE COMMUNITY BUDGET .

15 IN REPLY TO THAT OBJECTION IT MUST BE STATED THAT THE COMMUNITIES' RIGHT TO THE AMOUNTS IN QUESTION CANNOT DEPEND ON WHETHER THEY ARE ENTERED IN THE COMMUNITIES' BUDGET, SINCE THAT RIGHT CANNOT BE AFFECTED BY SUCH A FORMALITY .

16 CONSEQUENTLY, THE APPLICATION IS ADMISSIBLE .

SUBSTANCE

17 IN SUPPORT OF ITS APPLICATION THE COMMISSION ARGUES IN THE FIRST PLACE THAT BY PROVIDING FOR THE TRANSFER TO THE BANK' S RESERVES OF THE PROCEEDS OF THE TAX LEVIED ON THE REMUNERATION OF ITS STAFF FOR THE BENEFIT OF THE COMMUNITIES, THE CONTESTED DECISION INFRINGES ARTICLE 13 OF THE PROTOCOL AND ARTICLES 9 AND 12 OF REGULATION NO 260/68 . IN ITS VIEW, ARTICLE 22 OF THE PROTOCOL EXTENDS THE CLASS OF PERSONS COVERED BY THE PROTOCOL SO AS TO INCLUDE THE BANK AND ITS STAFF BUT WITHOUT CHANGING THE INTENDED PURPOSE OF THE TAX .

18 THE BOARD OF GOVERNORS CONTENDS THAT UNDER THE FIRST PARAGRAPH OF ARTICLE 22 OF THE PROTOCOL THE PRIVILEGES AND IMMUNITIES SET OUT IN THE PROTOCOL ARE GRANTED TO THE BANK AND ITS STAFF AND TO THE COMMUNITIES ALIKE . WITHOUT ADOPTING A DEFINITIVE POSITION ON THE QUESTION WHETHER THE BOARD OF GOVERNORS WAS ITSELF EMPOWERED TO DETERMINE THE CONDITIONS FOR COLLECTING THE TAX IN QUESTION, THE BOARD OF GOVERNORS CONSIDERS THAT THE TAX SHOULD BE COLLECTED FOR THE BENEFIT OF THE BANK IN ANY EVENT . IN ITS VIEW, REGULATION NO 260/68 MUST BE INTERPRETED TO THAT EFFECT .

19 IN ORDER TO ASSESS THE MERITS OF THE APPLICATION IT MUST BE OBSERVED IN THE FIRST PLACE THAT THE CONDITIONS AND PROCEDURE FOR APPLYING THE TAX FOR THE BENEFIT OF THE EUROPEAN COMMUNITIES ARE LAID DOWN IN COUNCIL REGULATION NO 260/68, WHICH IS BASED ON THE PROTOCOL AND IN PARTICULAR ON ARTICLE 13 THEREOF . ACCORDING TO ITS PREAMBLE, THE REGULATION IS INTENDED TO SUBJECT TO THE COMMUNITY TAX NOT ONLY OFFICIALS AND OTHER SERVANTS OF THE COMMUNITIES BUT ALSO PERSONS TO WHOM ARTICLE 13 OF THE PROTOCOL IS ALSO APPLICABLE, THOSE PERSONS INCLUDING, INTER ALIOS, THE STAFF OF THE BANK .

20 AS FAR AS WAGES AND SALARIES PAID BY THE COMMUNITIES TO THEIR OFFICIALS AND OTHER SERVANTS ARE CONCERNED, ARTICLE 9 OF THE REGULATION PROVIDES THAT THE TAX PROCEEDS ARE TO BE ENTERED AS REVENUE IN THE BUDGET OF THE COMMUNITIES, WHICH, UNDER ARTICLE 20 OF THE TREATY ESTABLISHING A SINGLE COUNCIL AND A SINGLE COMMISSION OF THE EUROPEAN COMMUNITIES, TOOK THE PLACE OF THE BUDGETS OF THE INDIVIDUAL COMMUNITIES . ARTICLE 12 OF THE REGULATION PROVIDES THAT THE REGULATION IS TO APPLY TO MEMBERS OF THE ORGANS OF THE BANK AND TO MEMBERS OF ITS STAFF AND RECIPIENTS OF THE PENSIONS IT PAYS "WITH REGARD TO SALARIES, WAGES AND EMOLUMENTS AND TO DISABILITY, RETIREMENT AND SURVIVORS' PENSIONS PAID BY THE BANK ". CONSEQUENTLY, THE REGULATION UNEQUIVOCALLY APPROPRIATES TO THE COMMUNITIES' BUDGET THE PROCEEDS OF THE TAX WITHHELD BY THE BANK FROM THE WAGES AND SALARIES PAID TO ITS STAFF .

21 THE DEFENCE SUBMITTED BY THE BOARD OF GOVERNORS RAISES THE QUESTION WHETHER THE COUNCIL WAS EMPOWERED UNDER THE PROTOCOL TO DETERMINE THE CONDITIONS AND PROCEDURE FOR TAXING THE WAGES AND SALARIES PAID BY THE BANK AND TO ALLOT TO THE COMMMUNITIES' BUDGET THE SUMS SO WITHHELD .

22 IN ORDER TO ANSWER THAT QUESTION IT IS NECESSARY TO CONSIDER THE SCOPE OF ARTICLE 13 OF THE PROTOCOL AND THE EFFECT OF ITS APPLICATION TO THE BANK HAVING REGARD TO ARTICLE 22 OF THE PROTOCOL .

23 THE SECOND PARAGRAPH OF ARTICLE 13 OF THE PROTOCOL PROVIDES THAT SALARIES, WAGES AND EMOLUMENTS ( HEREINAFTER ABBREVIATED TO "SALARIES ") PAID BY THE COMMUNITIES ARE TO BE EXEMPT FROM NATIONAL TAXES . HOWEVER, THE FIRST PARAGRAPH OF ARTICLE 13 SUBJECTS THOSE SALARIES TO A TAX FOR THE BENEFIT OF THE COMMUNITIES, IN ACCORDANCE WITH THE CONDITIONS AND PROCEDURE WHICH ARE TO BE LAID DOWN BY THE COUNCIL, ACTING ON A PROPOSAL FROM THE COMMISSION . IT FOLLOWS FROM THE RELATIONSHIP BETWEEN THOSE TWO PARAGRAPHS THAT IN THE INTERESTS OF THE COMMUNITIES' INDEPENDENCE AND EQUAL TREATMENT OF THEIR STAFF ARTICLE 13 IS TO REPLACE NATIONAL TAXES BY A COMMUNITY TAX WHICH IS APPLICABLE TO THE COMMUNITIES' STAFF ON THE BASIS OF UNIFORM CONDITIONS .

24 THOSE CONSIDERATIONS ARE EQUALLY VALID AS REGARDS THE APPLICATION OF ARTICLE 13 OF THE PROTOCOL TO THE STAFF OF THE BANK PURSUANT TO ARTICLE 22 OF THE PROTOCOL . IN ITS JUDGMENT OF 15 JUNE 1976 IN CASE 110/75 ( MILLS V EUROPEAN INVESTMENT BANK (( 1976 )) ECR 955 ) THE COURT HELD THAT THE BANK WAS A COMMUNITY BODY ESTABLISHED AND ENDOWED WITH LEGAL PERSONALITY BY THE TREATY . CONSEQUENTLY, THE BANK' S STAFF HAD TO BE EXEMPTED FROM NATIONAL TAXES JUST LIKE THE COMMUNITY' S STAFF AND BE SUBJECTED TO A COMMUNITY TAX . SINCE THE PROTOCOL CONTAINS NO PROVISIONS TO THE CONTRARY, THE RESULT OF THE APPLICATION OF ARTICLE 13 TO THE STAFF OF THE BANK MUST BE THAT THE COUNCIL HAS THE POWER TO EXTEND THE SCOPE OF THE CONDITIONS AND THE PROCEDURE ADOPTED PURSUANT TO THAT ARTICLE SO AS TO COVER THE STAFF OF THE BANK .

25 AS REGARDS THE INTENDED PURPOSE OF THE TAX TO WHICH STAFF OF THE COMMUNITIES ARE SUBJECT, ARTICLE 13 OF THE PROTOCOL PROVIDES THAT THE TAX IS TO BE COLLECTED "FOR THE BENEFIT OF THE COMMUNITIES ". ARTICLE 22 OF THE PROTOCOL IS SILENT AS TO THE PURPOSE TO WHICH THE TAX WITHHELD FROM STAFF OF THE BANK IS TO BE PUT BUT MERELY PROVIDES THAT ARTICLE 13 IS TO APPLY, IN PARTICULAR, TO THE BANK .

26 IT SHOULD BE OBSERVED IN THIS CONTEXT THAT IT DOES NOT FOLLOW FROM THE AIM OF ARTICLE 13 OF THE PROTOCOL, WHICH IS THAT THE NATIONAL TAXES WHICH WOULD NORMALLY BE APPLICABLE TO THE SALARIES OF STAFF OF THE COMMUNITIES SHOULD BE REPLACED BY A UNIFORM TAX, THAT THE PROCEEDS OF THAT TAX SHOULD BE ALLOTTED TO THE BODIES IN WHICH THE STAFF CONCERNED ARE EMPLOYED . SINCE THE RIGHTS AND PRIVILEGES ARISING OUT OF THE PROTOCOL WERE CONFERRED ON THE BANK ONLY IN ITS CAPACITY AS A BODY WHICH, ACCORDING TO ARTICLE 130 OF THE TREATY, ACTS IN THE INTEREST OF THE COMMUNITIES, ARTICLES 13 AND 22 OF THE PROTOCOL MUST BE INTERPRETED AS MEANING THAT THE TAX ON SALARIES PAID BY THE BANK IS ALSO LEVIED FOR THE BENEFIT OF THE COMMUNITIES .

27 THE BANK OPPOSES THAT INTERPRETATION, ARGUING THAT IT IS NEITHER AN INSTITUTION NOR A DEPARTMENT OF THE COMMUNITIES; RATHER, IT ENJOYS AUTONOMY VIS-A-VIS THE COMMUNITIES BY VIRTUE OF ITS LEGAL STATUS, ITS COMPOSITION AND ITS INSTITUTIONAL STRUCTURE, AS WELL AS BY VIRTUE OF THE NATURE AND ORIGIN OF ITS RESOURCES, WHICH ARE ABSOLUTELY INDEPENDENT OF THE COMMUNITIES' BUDGET .

28 IT IS TRUE THAT UNDER ARTICLE 129 OF THE TREATY THE BANK HAS LEGAL PERSONALITY DISTINCT FROM THAT OF THE COMMUNITY AND THAT IT IS ADMINISTERED AND MANAGED BY ORGANS OF ITS OWN IN ACCORDANCE WITH ITS STATUTE . IN ORDER TO PERFORM THE TASKS ASSIGNED TO IT BY ARTICLE 130 OF THE TREATY THE BANK MUST BE ABLE TO ACT IN COMPLETE INDEPENDENCE ON THE FINANCIAL MARKETS, LIKE ANY OTHER BANK . INDEED, THE BANK IS NOT FINANCED OUT OF THE BUDGET BUT FROM ITS OWN RESOURCES, WHICH CONSIST IN PARTICULAR OF THE CAPITAL SUBSCRIBED BY THE MEMBER STATES AND FUNDS BORROWED ON THE FINANCIAL MARKETS . LASTLY, THE BANK DRAWS UP ANNUAL ACCOUNTS AND A PROFIT AND LOSS ACCOUNT WHICH ARE AUDITED ANNUALLY BY A COMMITTEE APPOINTED BY THE BOARD OF GOVERNORS .

29 NEVERTHELESS, THE FACT THAT THE BANK HAS THAT DEGREE OF OPERATIONAL AND INSTITUTIONAL AUTONOMY DOES NOT MEAN THAT IT IS TOTALLY SEPARATED FROM THE COMMUNITIES AND EXEMPT FROM EVERY RULE OF COMMUNITY LAW . IT IS CLEAR IN PARTICULAR FROM ARTICLE 130 OF THE TREATY THAT THE BANK IS INTENDED TO CONTRIBUTE TOWARDS THE ATTAINMENT OF THE COMMUNITY' S OBJECTIVES AND THUS BY VIRTUE OF THE TREATY FORMS PART OF THE FRAMEWORK OF THE COMMUNITY .

30 THE POSITION OF THE BANK IS THEREFORE AMBIVALENT INASMUCH AS IT IS CHARACTERIZED ON THE ONE HAND BY INDEPENDENCE IN THE MANAGEMENT OF ITS AFFAIRS, IN PARTICULAR IN THE SPHERE OF FINANCIAL OPERATIONS, AND ON THE OTHER BY A CLOSE LINK WITH THE COMMUNITY AS REGARDS ITS OBJECTIVES . IT IS ENTIRELY COMPATIBLE WITH THE AMBIVALENT NATURE OF THE BANK THAT THE PROVISIONS GENERALLY APPLICABLE TO THE TAXATION OF STAFF AT THE COMMUNITY LEVEL SHOULD ALSO APPLY TO THE STAFF OF THE BANK . THIS IS TRUE IN PARTICULAR OF THE RULE THAT THE TAX IN QUESTION IS COLLECTED FOR THE BENEFIT OF THE COMMUNITIES' BUDGET . CONTRARY TO THE CONTENTIONS OF THE BOARD OF GOVERNORS, THE FACT THAT THE TAX IS ALLOTTED TO THAT PURPOSE IS NOT LIABLE TO UNDERMINE THE OPERATIONAL AUTONOMY AND REPUTATION OF THE BANK AS AN INDEPENDENT INSTITUTION ON THE FINANCIAL MARKETS SINCE IT DOES NOT AFFECT THE CAPITAL OR THE ACTUAL MANAGEMENT OF THE BANK .

31 THE BOARD OF GOVERNORS RESISTS THAT CONCLUSION BY ADDUCING A NUMBER OF ARGUMENTS BASED ON THE FACT THAT THE PAYMENT OF THE PROCEEDS OF THE TAX IN QUESTION TO THE COMMUNITIES' BUDGET WOULD DIMINISH THE BANK' S ASSETS, WHICH ARE INTENDED TO COVER ITS OPERATING COSTS AND IN PARTICULAR THE SALARIES OF ITS STAFF AND WHICH THE MEMBER STATES WOULD BE ENTITLED TO CLAIM IN THE EVENT OF THE WINDING-UP OF THE BANK .

32 THOSE ARGUMENTS CANNOT BE ACCEPTED . THE TRANSFER OF THE PROCEEDS OF THE TAX TO THE COMMUNITIES' BUDGET AFFECTS ONLY THE SUMS WITHHELD FROM SALARIES PAID BY THE BANK TO ITS STAFF AND NOT THE BANK' S OWN RESOURCES OR THE CAPITAL AMOUNTS WHICH WOULD BE PAYABLE TO THE MEMBER STATES IF THE BANK' S ACTIVITIES WERE SUSPENDED OR IT WENT INTO LIQUIDATION . CONSEQUENTLY, THE COLLECTION BY THE BANK OF TAX ON THE GROSS SALARIES OF ITS STAFF FOR THE BENEFIT OF THE COMMUNITIES HAS A NEUTRAL EFFECT ON THE BANK' S FINANCIAL POSITION .

33 IT FOLLOWS FROM THE FOREGOING THAT THE COUNCIL HAD THE POWER, UNDER THE COMBINED PROVISIONS OF ARTICLES 13 AND 22 OF THE PROTOCOL, TO DETERMINE IN REGULATION NO 260/68 THE CONDITIONS AND PROCEDURE FOR LEVYING THE TAX ON THE SALARIES OF THE STAFF OF THE BANK AND TO ALLOT THE PROCEEDS OF THAT TAX TO THE COMMUNITIES' BUDGET . IN THOSE CIRCUMSTANCES, IT IS UNNECESSARY TO CONSIDER THE SIGNIFICANCE OF THE AGREEMENT WHICH THE PRESIDENT OF THE BANK IS SAID TO HAVE GIVEN TO THE ENTRY OF THE TAX PROCEEDS AS REVENUE IN THE COMMUNITIES' BUDGET ON WHICH THE COMMISSION RELIES IN SUPPORT OF ITS ARGUMENT .

34 THE DECISION OF THE BOARD OF GOVERNORS OF THE EUROPEAN INVESTMENT BANK OF 30 DECEMBER 1985 ON THE DISPOSAL OF THE PROCEEDS OF THE INCOME TAX WITHHELD BY THE BANK FROM SALARIES AND PENSIONS PAID TO ITS STAFF MUST THEREFORE BE DECLARED VOID .

Decision on costs

COSTS

35 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE, THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . SINCE THE BOARD OF GOVERNORS OF THE BANK HAS BEEN UNSUCCESSFUL IN ITS SUBMISSIONS, IT MUST BE ORDERED TO PAY THE COSTS .

Operative part

ON THOSE GROUNDS,

THE COURT

HEREBY :

( 1 ) DECLARES THAT THE DECISION OF THE BOARD OF GOVERNORS OF THE EUROPEAN INVESTMENT BANK OF 30 DECEMBER 1985 ON THE DISPOSAL OF THE PROCEEDS OF THE INCOME TAX WITHHELD BY THE BANK FROM SALARIES AND PENSIONS PAID TO ITS STAFF IS VOID;

( 2 ) ORDERS THE BOARD OF GOVERNORS OF THE EUROPEAN INVESTMENT BANK TO PAY THE COSTS .