EN Official Journal of the European Union C 140/27

Action brought on 17 April 2007 — France v Commission

(Case T-116/07)

(2007/C 140/48)

Language of the case: French

Parties

Applicant: French Republic (represented by: G. de Bergues and S. Ramet, Agents)

Defendant: Commission of the European Communities

Form of order sought

— annul the contested decision in its entirety;

— order the Commission to pay the costs.

Pleas in law and main arguments

By decision of 30 June 1997, adopted following a proposal from the Commission and in accordance with the procedure laid down in Council Directive 92/81/EEC (1), the Council authorised the Member States to apply or to continue to apply the existing reduced rates of excise duty or exemptions from excise duty to certain mineral oils when used for specific purposes. By four subsequent decisions, the Council extended that authorisation, the final authorisation period expiring on 31 December 2006. France is authorised to apply these reduced rates or exemptions to heavy fuel oil used as fuel for the production of alumina in the Gardanne region.

In a letter of 30 December 2001, the Commission notified France of its decision to initiate proceedings under Article 88(2) of the EC Treaty relating to the exemption from excise duty on mineral oils used as fuel for alumina production in the Gardanne regio (2). On 7 December 2005, in consequence of this procedure, the Commission adopted Decision 2006/323/EC finding that exemptions from excise duty on mineral oils used as fuel for alumina production in the Gardanne region, the Shannon region and Sardinia, implemented by France, Ireland and Italy respectively, constituted State aid within the meaning of Article 87(1) EC that is in part incompatible with the common market, and thus ordered the Member States concerned to recover all such aid (3). By action brought on 17 February 2006, France sought to have that decision annulled in part in so far as it affected the exemption granted by France to the Gardanne region (4).

The Commission decided to extend the formal investigation procedure regarding the exemption from excise duty on heavy mineral oils used for alumina production for the period commencing 1 January 2004. After giving the Member States and the third parties concerned the opportunity to submit their observations on that matter, the Commission adopted Decision C (2007) 286 final of 7 February 2007 concerning the exemption from excise duty on mineral oils used as fuel for alumina production in the Gardanne region, the Shannon region and Sardinia, applied by France, Ireland and Italy respectively (State aid No C 78-79-80/2001). That is the decision which is contested in the present action.

In support of its action, the applicant relies on two pleas, the first alleging infringement of the concept of State aid within the meaning of Article 87(1) EC. It submits that the Commission committed an error of law in holding that State aid existed even though not all the conditions required to establish the existence of aid, as laid down in the Altmark case (5), had been fulfilled. The applicant also submits that the decisions authorising exemptions up to 31 December 2006 were adopted by the Council following a proposal from the Commission, which, according to the applicant, should have ensured before making such a proposal that the authorisation would not lead to a distortion of competition. The applicant therefore claims that the Commission could not, on the one hand, propose that the Council adopt a decision authorising an exemption from excise duty and not object to that authorisation being extended until 31 December 2006 and, on the other hand, find that that exemption constitutes State aid incompatible with the common market as of 1 January 2004.

The second plea raised by the applicant alleges a failure to state reasons in that the contested decision does not set out arguments concerning the market in question or the position of the various undertakings in that market or relating to nature of the harm to competition or the effect on the trade in question.

(1) Council Directive of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils

(2) Published in OJ 2002 C 30

(3) Decision C (2005) 4436 final, State aid Nos C 78-79-80/2001, OJ 2006 L 119, p. 12

(4) Case T-56/06 France v Commission, OJ 2006 C 96, p. 21

(5) Case C-280/00 Altmark Trans [2004] ECR I-7747