Keywords

Summary



Keywords

1. State aid – Commission decision finding aid to be incompatible with the common market and ordering it to be repaid

(EC Treaty, Art. 93 (now Art. 88 EC) and Art. 173, fifth subpara. (now, after amendment, Art. 230, fifth subpara., EC))

2. State aid – Examination by the Commission

(EC Treaty, Arts 38 and 92 (now, after amendment, Arts 32 EC and 87 EC), and Arts 42 and 93 (now Arts 36 EC and 88 EC); Council Regulations Nos 26 and 797/85)

3. State aid – Existing aid and new aid

4. State aid – Examination by the Commission

(Council Regulation No 659/1999)

5. State aid – Recovery of unlawful aid

(EC Treaty, Art. 93(3) (now Art. 88(3) EC))

6. State aid – Decision of the Commission that aid which has not been notified is incompatible with the common market

(EC Treaty, Arts 93(3) and 190 (now Arts 88(3) EC and 253 EC))

7. State aid – Prohibited – Exceptions – Scope – Restrictive interpretation

(EC Treaty, Art. 92(2)(b) (now, after amendment, Art. 87(2)(b) EC))

8. State aid – Prohibited – Exceptions – Aid to promote or facilitate the economic development of certain regions or certain activities

(EC Treaty, Art. 92(3)(a) and (c) (now, after amendment, Art. 87(3)(a) and (c) EC))

Summary

1. The requirements of legal certainty, and more specifically those deriving from the principle of the force of res judicata , that it is not possible for a recipient of aid forming the subject-matter of a Commission decision adopted on the basis of Article 93 of the Treaty (now Article 88 EC), who could have challenged that decision and who allowed the mandatory time-limit laid down in this regard by the fifth paragraph of Article 173 of the Treaty (now, after amendment, the fifth paragraph of Article 230 EC) to elapse, to call in question the lawfulness of that decision before the national courts in an action brought against the measures taken by the national authorities for implementing that decision. To accept that in such circumstances the person concerned could challenge the implementation of the decision in proceedings before the national court on the ground that the decision was unlawful would in effect enable the person concerned to overcome the definitive nature which the decision assumes as against that person once the time-limit for bringing an action has elapsed.

This is particularly the case when the Commission’s decision addressed to the Member State concerned makes explicit reference to the recipient of the individual aid in question and that State communicated the decision to the recipient, stating that it could bring an action for annulment thereof.

By contrast, the situation is different when the contested decision, addressed to the Member State, concerns aid schemes intended for categories of persons defined in a general manner and not explicitly identified recipients, and the decision was not notified by that Member State to any recipients of the aid in question. In that case, it is not self-evident that an action for annulment brought against the contested decision brought by the recipients of such aid measures would have been admissible and, accordingly, references for a preliminary ruling from a national court before which those recipients contest the validity of the decision and which relate to the validity thereof are admissible.

(see paras 31-34)

2. It follows from the provisions of Article 42 of the Treaty (now Article 36 EC) that the rules governing competition are applicable to production of and trade in agricultural products, as defined in Article 38 of the Treaty (now, after amendment, Article 32 EC) only to the extent determined by the Council. The Council has adopted various regulations, principally Regulation No 26 applying certain rules of competition to production of and trade in agricultural products, regulations establishing a common market organisation, which deal with the aid system, and also various other regulations, in particular Regulation No 797/85 on improving the efficiency of agricultural structures, which also deals with it. Consequently, in order to determine whether, in examining aid measures in the light of Article 92 of the Treaty (now, after amendment, Article 87 EC) and Article 93 of the Treaty (now Article 88 EC), the Commission founded the contested decision on a correct legal basis and had the power to adopt that decision, it is necessary to ascertain whether the products concerned by those aid measures are agricultural products within the meaning of Article 38 of the Treaty and, if so, to what extent in the light of those regulations which may apply, they are subject to the provisions of the Treaty governing State aid. Only those agricultural products which are not subject to a common market organisation come within the scope of the provisions of the Treaty on State aid, the application of which is limited by Regulation No 26.

(see paras 37-42, 48)

3. Measures taken after the entry into force of the Treaty to grant or alter aid, whether the alterations relate to existing aid or to initial plans notified to the Commission, must be regarded as new aid. Consequently, the mere reference in a law subsequent to the entry into force of the Treaty to a law preceding that date in no way suffices to establish that the aid measures introduced by the former are founded on the latter and are existing aid, where the law to which reference is thus made has been amended and supplemented subsequently.

(see paras 51-52)

4. Even though, until the adoption of Regulation No 659/1999 laying down detailed rules for the application of Article 93 of the Treaty (now Article 88 EC), the Commission was not bound by any specific time-limits for examining aid measures, nevertheless, in the absence of any provision in that regard, the fundamental requirement of legal certainty had the effect of preventing it from indefinitely delaying the exercise of its powers.

(see para. 61)

5. In view of the mandatory nature of the monitoring of State aid by the Commission under Article 93 of the Treaty (now Article 88 EC), undertakings to which aid has been granted may not, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the procedure laid down in that article. A diligent businessman should normally be able to determine whether that procedure has been followed. Where aid is paid without prior notification to the Commission, so that it is unlawful under Article 93(3) of the Treaty, the recipient of the aid cannot have at that time a legitimate expectation that its grant is lawful.

(see paras 64-65)

6. In the case of aid which was not notified to the Commission at the planning stage, in the statement of reasons for its decision the Commission is bound to refer at least to the circumstances in which aid has been granted where those circumstances show that the aid is such as to affect trade between Member States, but it is not bound to demonstrate the real effect of aid already granted. If it were, that requirement would ultimately favour Member States which grant aid in breach of the duty to notify laid down in Article 93(3) of the Treaty (now Article 88(3) EC), to the detriment of those which do notify aid at the planning stage.

(see para. 74)

7. Article 92(2)(b) of the Treaty (now, after amendment, Article 87(2)(b) EC) provides that aid to make good damage caused by natural disasters or exceptional occurrences is compatible with the common market. Since this is an exception to the general principle that State aid is incompatible with the common market, that provision must be interpreted narrowly. Only damage caused by natural disasters or exceptional occurrences may be compensated for under that provision. It follows that there must be a direct link between the damage caused by the exceptional occurrence and the State aid and that as precise an assessment as possible must be made of the damage suffered by the producers concerned.

(see para. 79)

8. In the assessment of the validity of the aid in the light of the provisions of Article 92(3)(a) and (c) of the Treaty (now, after amendment, Article 87(3)(a) and (c) EC) relating to aid to promote or facilitate the economic development of certain regions or certain activities, the Commission enjoys a wide discretion, the exercise of which involves assessments of an economic and social nature which must be made within a Community context. The Community Courts, in reviewing whether that freedom was lawfully exercised, cannot substitute their own assessment for that of the competent authority but must restrict themselves to examining whether the authority’s assessment is vitiated by a manifest error or misuse of powers.

(see para. 84)