Opinion of the Advocate-General



Opinion of the Advocate-General

Table of contents

I – Introduction

II – Community legal framework

III – The tax scheme applicable to the coordination centres

IV – Facts and procedural background

A – Facts prior to the Commission Decision

B – The Commission Decision

C – Procedures before the Court against the Commission Decision

D – Facts subsequent to the Commission Decision

E – The Council Decision

F – Procedure before the Court against the Council Decision

V – The actions

A – The action against the Council Decision (Case C‑399/03)

1. Forms of order sought and pleas in law

2. Appraisal

B – The actions against the Commission Decision (Joined Cases C‑182/03 and C‑217/03)

1. Forms of order sought

a) Case C-182/03 Belgium v Commission

b) Case C-217/03 Forum 187 v Commission

2. The admissibility of the action brought by Forum 187

a) Arguments of the parties

b) Appraisal

i) The admissibility of the action brought by Forum 187 on the basis that it is itself directly and individually concerned

ii) The admissibility of the application brought by Forum 187 on the ground that it is acting in place of some of its members

3. The merits of the actions

a) The application by Forum 187 for the annulment of the Decision of 17 February 2003 in its entirety

i) The plea alleging the lack of any legal basis and infringement of the principle of legal certainty

– Arguments of the parties

– Appraisal

ii) The plea alleging infringement of Article 87(1) EC

– The method of analysis of the scheme in question

– Whether an advantage is conferred on certain undertakings

– The existence of a commercial advantage

– Assessment of taxable income

– The exemption from property tax

– The exemption from capital duty

– The exemption from withholding tax

– The notional withholding tax

Selectivity

Justification on the grounds of the nature and the general scheme of the system

VI – Conclusions

(

State aid

–

Tax scheme applicable to coordination centres established in Belgium

–

Application by an association

–

Admissibility

–

Commission decision that that scheme does not constitute aid

–

Change by the Commission of its assessment

–

Procedure

–

Regulation (EC) No 659/1999

–

Procedure applicable to monitoring of existing aid

–

Article 87(1) EC

–

Transitional measures

–

Protection of legitimate expectations

–

General principle of equal treatment

)

Case C-399/03

Commission of the European Communities

v

Council of the European Union

(Aid granted by the Kingdom of Belgium to coordination centres – Aid intended to allow the extension of the tax scheme tax applicable to coordination centres declared to be incompatible with the common market – Council decision declaring such aid to be compatible with the common market – Article 88(2), fourth indent, EC – Illegality)

I – Introduction

1. The three actions for annulment before the Court concern the tax scheme applicable to coordination centres adopted by the Kingdom of Belgium.

2. A coordination centre is an undertaking created by a group of multinational companies for the purpose of providing various services to those companies, in particular in the financial field. In 1982, the Kingdom of Belgium introduced a special tax scheme for the benefit of such centres under which individual approvals might be granted for a period of 10 years. Such approvals were renewable.

3. The Commission of the European Communities, to which the scheme had been notified, held that it did not constitute State aid. However, following studies undertaken by the Council of the European Union in 1997 on tax competition between Member States, it carried out a fresh investigation into the scheme.

4. By decision of 17 February 2003, (2) the Commission held that the scheme constituted State aid incompatible with the common market. It ordered the Belgian Government not to grant benefits under it to new coordination centres or to renew the 10-year approvals after 17 February 2003. However, it allowed the approvals then in force to remain in effect until their expiry or 31 December 2010, at the latest.

5. After that decision was adopted, the Belgian Government requested the Council to authorise it to grant until 31 December 2005 a similar tax treatment to that of the scheme applicable to coordination centres to centres having an approval which expired between 17 February 2003 and 31 December 2005. The Council allowed that request by decision of 16 July 2003. (3)

6. An application for the annulment of the Commission Decision was brought by the Kingdom of Belgium and by Forum 187 ASBL, (4) an association formed under Belgian law which is a federation of coordination centres in Belgium, in Joined Cases C-182/03 and C‑217/03, respectively.

7. An application for annulment was brought by the Commission against the Council Decision in Case C-399/03.

8. As the legal and factual background to both those actions is the same, I shall consider them together in this Opinion.

9. In so doing, I shall consider the following six points: whether the Council had the power to adopt the Decision of 16 July 2003, whether the action brought by Forum 187 is admissible, whether the Commission was entitled to alter its previous determination as to the existence of aid, whether the classification of the tax scheme applicable to the coordination centres as State aid was well founded and, finally, whether, in ordering the Kingdom of Belgium not to renew, even temporarily, approvals expiring after the notification of its decision of 17 February 2003, the Commission failed to have regard to the legitimate expectations of the coordination centres and the general principle of equal treatment.

II – Community legal framework

10. The EC Treaty contains a prohibition in principle of State aid, coupled with certain exceptions. Article 87(1) EC states:

‘Save as otherwise provided in this Treaty, 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 common market.’

11. Article 87(2) and (3) EC go on to list the types of State aid which are automatically compatible with the common market and those which may be considered to be compatible with it. The latter include aid to promote the economic development of areas where there is serious underemployment and aid to facilitate the development of certain economic activities, where such aid does not adversely affect trading conditions to an extent contrary to the common interest.

12. Article 88 EC provides:

‘1. The Commission shall, in cooperation with Member States, keep under constant review all systems of aid operating in those States. It shall propose to the latter any appropriate measures required by the progressive development or by the functioning of the common market.

2. If, after giving notice to the parties concerned to submit their comments, the Commission finds that aid granted by a State or through State resources is not compatible with the common market having regard to Article 87, or that such aid is being misused, it shall decide that the State concerned shall abolish or alter such aid within a period of time to be determined by the Commission.

If the State concerned does not comply with this decision within the prescribed time, the Commission or any other interested State may, in derogation from the provisions of Articles 226 and 227, refer the matter to the Court of Justice direct.

On application by a Member State, the Council may, acting unanimously, decide that aid which that State is granting or intends to grant shall be considered to be compatible with the common market, in derogation from the provisions of Article 87 or from the regulations provided for in Article 89, if such a decision is justified by exceptional circumstances. If, as regards the aid in question, the Commission has already initiated the procedure provided for in the first subparagraph of this paragraph, the fact that the State concerned has made its application to the Council shall have the effect of suspending that procedure until the Council has made its attitude known.

If, however, the Council has not made its attitude known within three months of the said application being made, the Commission shall give its decision on the case.

3. The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the common market having regard to Article 87, it shall without delay initiate the procedure provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.’

13. Article 89 EC authorises the Council to make regulations for the application of Articles 87 EC and 88 EC. Pursuant to that power, the Council has adopted Regulation (EC) No 659/1999, (5) which sets out detailed rules concerning the procedures to be followed for the purposes of the application of Article 88 EC.

14. Article 1(b) of Regulation No 659/1999 defines the concept of ‘existing aid’. It provides that for the purposes of that regulation, ‘existing aid’ is to mean:

‘(i) … all aid which existed prior to the entry into force of the Treaty in the respective Member States, that is to say, aid schemes and individual aid which were put into effect before, and are still applicable after, the entry into force of the Treaty;

(ii) authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council;

(iii) aid which is deemed to have been authorised pursuant to Article 4(6) of this Regulation [(6) ] or prior to this Regulation but in accordance with this procedure;

(iv) aid which is deemed to be existing aid pursuant to Article 15; [(7) ]

(v) aid which is deemed to be an existing aid because it can be established that at the time it was put into effect it did not constitute aid, and subsequently became aid due to the evolution of the common market and without having been altered by the Member State. Where certain measures become aid following the liberalisation of an activity by Community law, such measures shall not be considered as existing aid after the date fixed for liberalisation’.

15. Articles 17 to 19 of Regulation No 659/1999 set out the procedures for the monitoring of existing aid. Article 17 provides that the Commission is to review existing aid schemes in cooperation with the Member States. Where it considers that such a scheme is not, or is no longer, compatible with the common market, it is to inform the Member State concerned of its preliminary view and to give it the opportunity to submit its comments within a period of one month, which may be extended.

16. Article 18 of the regulation states that where the Commission, in the light of the information submitted by the Member State pursuant to Article 17, concludes that the existing aid scheme is not, or is no longer, compatible with the common market, it is to issue a recommendation proposing appropriate measures to the Member State concerned. The recommendation may propose, in particular: substantive amendment of the aid scheme, the introduction of procedural requirements, or the abolition of the aid scheme.

17. Pursuant to Article 19 of the regulation, where the Member State concerned does not accept the proposed measures and the Commission, having taken into account the arguments of the Member State concerned, still considers that those measures are necessary, it is to initiate the formal investigation procedure under Article 88(2) EC.

III – The tax scheme applicable to the coordination centres

18. The tax scheme applicable to coordination centres adopted by the Kingdom of Belgium was introduced by Royal Decree of 30 December 1982. (8) It is common ground that no material amendments were made to it between the time when the Commission notified the Belgian Government that it considered that it did not constitute State aid, in 1984, in 1987 and then in 1990, and its decision of 17 February 2003. (9)

19. A coordination centre may be created as a Belgian company having legal personality or as a branch in Belgium of a foreign company. To benefit from the tax scheme introduced by Royal Decree No 187, a centre must first receive individual approval by royal decree. In order to obtain that approval, the centre must form part of a multinational group of companies. That condition requires, inter alia, that the members of the group be established in at least four countries. The group must also have capital and reserves of at least BEF 1 thousand million. It must in addition have an annual turnover of at least BEF 10 thousand million. Banks and insurance companies are excluded from the scheme.

20. The centre in question must have as its exclusive object the development and centralisation of one or more activities of a preparatory or auxiliary nature, which must be undertaken exclusively for the benefit of all or some of the group companies. (10)

21. At the end of the first two years of its operations, it must have the equivalent of at least 10 full-time employees in Belgium.

22. The approval granted to a centre is valid for 10 years and renewable for the same period.

23. The tax scheme for approved coordination centres comprises the following measures:

– the centres’ taxable income is determined at a standard rate. It represents a percentage of their total operating expenses and costs, under exclusion of staff costs, financial charges and corporation tax;

– the centres are exempt from property tax on the buildings they use to carry on their business activities;

– the 0.5 per cent registration fee is not payable on contributions made to a centre or on increases to its registered capital;

– the centres are exempt from withholding tax. They are thus exempt from withholding tax on dividends, interest and royalties distributed by those centres, with certain exceptions, and on income received by such centres on their cash deposits;

– the centres pay an annual tax fixed at BEF 400 000 per full-time member of staff, but which cannot exceed BEF 4 000 000 per centre.

IV – Facts and procedural background

A – Facts prior to the Commission Decision

24. The tax scheme applicable to the coordination centres was investigated for the first time by the Commission in 1984. In a decision of 16 May 1984, it held that the scheme did not constitute aid. However, the scheme that was implemented in practice differed from the scheme that had been notified to it. The Commission therefore initiated the formal investigation procedure in December 1985. After alterations were made to the scheme by the Belgian Government, the Commission held that it no longer contained an aid element and, by letter of 9 March 1987, it informed the Government that the procedure had been closed.

25. That assessment was confirmed in the answer given on behalf of the Commission by Leon Brittan, the Commissioner responsible for competition, on 24 September 1990 to Written Question No 1735/90 by Mr Gijs de Vries, Member of the European Parliament. (11)

26. Following a review of tax competition between the Member States, the ‘Economic and Financial Affairs’ Council (Ecofin) adopted a code of conduct for business taxation. (12) It set up an ad hoc group, to be called the ‘Code of Conduct Group’, to assess national tax measures having harmful consequences for the common market.

27. Following that action by the Member States, the Commission undertook to draw up guidelines on the application of Articles 87 and 88 EC to measures relating to direct business taxation and committed itself ‘to the strict application of the aid rules concerned’. On 11 November 1998, the Commission accordingly adopted a notice on the application of the State aid rules to measures relating to direct business taxation. (13) On the basis of that notice, the Commission investigated or re-investigated the tax schemes in force in the various Member States.

28. In the course of those investigations, the Commission asked the Belgian authorities in February 1999 for information regarding the tax scheme applicable to the coordination centres, which was cited by the Code of Conduct Group as one of the 66 national measures that had potentially harmful consequences for the functioning of the common market. Those authorities replied in March 1999.

29. In July 2000, the Commission services informed those authorities that the scheme appeared to constitute State aid. For the purpose of initiating the cooperation procedure with those authorities in accordance with Article 17 of Regulation No 659/1999, the Commission services invited them to submit their observations within one month.

30. At its meeting of 26 and 27 November 2000, the ‘Ecofin’ Council noted that, in accordance with its resolution of 1 December 1997, all harmful measures relating to direct business taxation were to have been eliminated by 1 January 2003. It adopted a proposal from the Presidency that, as regards undertakings benefiting from a harmful tax scheme on 31 December 2000, the effects of those schemes would expire at the latest on 31 December 2005, whether they were schemes granted for a fixed period or not. It also decided that it could, on a case‑by-case basis and in order to take account of particular circumstances, decide following a report from the Code of Conduct Group to extend the effects of certain harmful tax schemes beyond 31 December 2005. (14)

31. Following an exchange of correspondence with the Belgian authorities, the Commission wrote to those authorities on 11 July 2001 to propose, on the basis of Article 88(1) EC, a number of appropriate measures to render the tax scheme applicable to the coordination centres compatible with the common market. In that letter, the Commission also indicated to those authorities that, as a transitional measure, coordination centres approved before those appropriate measures were accepted might continue to benefit from that tax scheme until 31 December 2005. (15)

32. As the Belgian authorities did not accept the measures proposed by the Commission, the latter initiated the formal investigation procedure by decision notified by letter of 27 February 2002 and published in the Official Journal of the European Communities on 20 June 2002. (16) In particular, it invited the Kingdom of Belgium to inform it of the number of coordination centres that had been approved at the date of that letter and, in respect of each of them, the date of the most recently granted approval or renewal. It also invited that Member State and interested third parties to submit observations and to supply any relevant information for determining whether the beneficiaries of the scheme at issue had legitimate expectations that transitional measures would be laid down. (17)

33. By letter of 16 May 2002, the Belgian authorities notified a new tax scheme applicable to the coordination centres to the Commission, which was registered by the Commission as new aid under reference N 351/2002.

34. On 21 January 2003, the ‘Ecofin’ Council approved the extension of the effects of certain harmful tax schemes beyond 2005. As regards the Belgian tax scheme applicable to the coordination centres, it provided that centres subject to the scheme on 31 December 2000 could continue to benefit from it until 31 December 2010. (18)

B – The Commission Decision

35. On 17 February 2003, the Commission adopted the contested decision, which was notified on the same day to the Kingdom of Belgium.

36. In that decision, the Commission first of all gives its reasons for classifying the tax scheme applicable to the coordination centres as ‘existing aid’ and the legal basis for the procedure it followed. The decision states that Article 1(b) of Regulation No 659/1999 could serve as a legal basis in the matter and that, failing that, Articles 87 and 88 EC were to be treated as the true legal basis of the Commission’s action.

37. The decision of 17 February 2003 also indicates that, if it were to be regarded as a withdrawal or amendment of the decisions of 1984 or 1987, it satisfies the conditions for the exercise of the Commission’s right to withdraw or amend any unlawful favourable measure.

38. In the remainder of the decision, the Commission sets out the reasons why it takes the view that the various measures which form the tax scheme applicable to the coordination centres satisfy the conditions laid down under Article 87(1) EC, but do not qualify for any of the derogations provided for in Article 87(2) and (3).

39. The Commission lastly considers the legitimate expectations of the coordination centres. It recognises the existence of such expectations and indicates that they justify its allowing centres having an approval on 31 December 2000 to continue to enjoy the benefits of the tax scheme in question until the expiry of their period of approval current when the Decision of 17 February 2003 was notified and 31 December 2010, at the latest. It indicates that its position is based on the following grounds.

40. The Commission states that the approval granted by the Belgian authorities constitutes acknowledgement in advance that the approved centre will satisfy the requirements for benefiting from the derogating scheme laid down under Royal Decree No 187 for 10 years, without having to provide evidence of doing so each year. However, it indicates that that approval does not represent an undertaking on the part of those authorities to the approved centre that it will maintain the benefits conferred by that scheme for 10 years. It also notes that, in so far as it used the procedure for monitoring existing aid, its decision cannot have retroactive effect and that it must ensure legal certainty by setting, if necessary, a transitional period for the phasing out of the effect of the scheme at issue.

41. The Commission considers in that regard that it should take into account the substantial investments made by the coordination centres and the groups to which they belong relating to the creation and development of the infrastructure for the centres and the changes made to the organisation of the structures, networks, procedures and the distribution of activities within the group. It must also take into account the long-term commitments made to staff, property companies and financial institutions. The Commission states that, although approval provides no guarantee as to the continued existence of the tax scheme in question or of the benefits under it, it recognises that centres were established, investments made and commitments entered into in the reasonable and legitimate expectation of a certain degree of continuity in the economic conditions, including the tax scheme. It therefore concludes that it should allow a transitional period so that the scheme for the current beneficiaries may be gradually phased out.

42. However, it adds as the 120th recital:

‘Because the approvals do not represent a right to the continuation of the scheme or its advantageous character, even during the approval period, the Commission believes that they cannot, under any circumstances, confer a right to have the scheme renewed when the present approval expires. In view of the explicit restriction of the approval to 10 years it is impossible that a legitimate expectation should have been created as to automatic renewal, which would have amounted to approval that could theoretically last for ever.’

43. The above considerations lead the Commission to draw the following conclusions:

‘121. The Commission concludes that the tax scheme covering coordination centres in Belgium is incompatible with the common market and that measures must be taken to remedy the incompatibility of its various components by abolishing or amending them. As of the date of notification of this Decision, new beneficiaries can no longer be covered by this scheme or sections thereof, nor can it be maintained by renewing existing approvals. The Commission notes that centres approved in 2001 have not benefited from the scheme since 31 December 2002.

122. As regards the centres currently covered by the scheme, the Commission acknowledges that the 1984 Decision approving Royal Decree No 187 and the reply to a Parliamentary question given by the Member of the Commission responsible for competition … gave rise to a legitimate expectation that the scheme did not violate the rules on State aid enshrined in the Treaty.

123. In view of the substantial investments made on this basis, as well as the need to respect legitimate expectations and the legal certainty of the beneficiaries, it is justifiable to allow a reasonable period for eliminating the scheme’s impact on the existing approved centres. The Commission takes the view that this reasonable period comes to an end on 31 December 2010. The centres whose approval expires before this date can no longer make use of their approval after the deadline. After the date on which approval lapses and at any rate after 31 December 2010, it will be unlawful to grant or maintain the tax concessions in question.’

44. The operative part of the Decision of 17 February 2003 originally provided as follows:

‘Article 1

The tax scheme which currently operates in Belgium for the benefit of coordination centres approved under Royal Decree No 187 constitutes aid incompatible with the common market.

Article 2

Belgium is required to withdraw the aid referred to in Article 1 or to amend it in such a way as to make it compatible with the common market.

As of the date of notification of this Decision, the benefits of this scheme or sections thereof may no longer be granted to new beneficiaries or maintained by renewing existing agreements.

With regard to centres approved before 31 December 2000, the scheme may be maintained until the expiry date of the individual approval applying on the date hereof and until 31 December 2010 at the latest. In accordance with the second paragraph, if approval is renewed prior to that date the benefits of the scheme dealt with in this Decision may no longer be granted, even temporarily.

…’

45. As it decided that the words ‘on the date hereof’ in the first sentence of the third paragraph of Article 2 of the decision might lead to confusion, the Commission decided to replace them with the words ‘on the date of notification of this Decision’. It therefore drew up a corrigendum to that effect, which was notified to the Kingdom of Belgium on 25 April 2003.

46. That corrigendum provides that the third paragraph of Article 2 of the Decision of 17 February 2003 should accordingly read as follows:

‘With regard to centres approved before 31 December 2000, the scheme may be maintained until the expiry date of the individual approval applying on the date of notification of this Decision (19) and until 31 December 2010 at the latest. In accordance with the second paragraph, if approval is renewed prior to that date the benefits of the scheme dealt with in this Decision may no longer be granted, even temporarily.’

47. In the light of that corrigendum, the scope of the transitional measures laid down under the Decision of 17 February 2003 must be understood as follows, as all the parties accepted in the course of the proceedings. All coordination centres benefiting from an individual approval effective at the date the decision was notified, namely 17 February 2003, may continue to benefit from it until its expiry or, if earlier, 31 December 2010. However, no approval may be renewed after 17 February 2003.

C – Procedures before the Court against the Commission Decision

48. By application of 25 April 2003, the Kingdom of Belgium brought proceedings for the annulment of the Decision of 17 February 2003, in its original version. It also requested that application of the decision be suspended.

49. Following the corrigendum notified to the Kingdom of Belgium on 25 April 2003, the latter submitted a fresh application to the Court dated 9 May 2003, on the basis of Article 42(2) of the Rules of Procedure, seeking to raise two new pleas in law and to bring the Commission Decision, in its corrected version, within the scope of its action for annulment.

50. By application of 28 April 2003, Forum 187 brought proceedings before the Court of First Instance of the European Communities for the annulment of the Commission Decision, in its original version. It also requested that application of the decision be suspended. On 16 May 2003, it brought an additional application against the Commission Decision, as corrected.

51. By order of 16 May 2003, the Court of First Instance declined jurisdiction in that action and that application for interim measures in favour of the Court of Justice, where those matters were registered under numbers C-217/03 and C-217/03 R, respectively.

52. By separate document of 16 June 2003, the Commission raised a plea that the action brought by Forum 187 was inadmissible. The latter lodged its observations in reply to that objection on 7 August 2003. By order of 30 March 2004, the Court reserved a decision on that plea until the final judgment.

53. By order of 26 June 2003, the President of the Court gave a ruling on the requests brought by the Belgian Government and Forum 187 that application of the Commission Decision be suspended. He made the following order:

‘1. The operation of the decision of the Commission C (2003) 564 final of 17 February 2003 concerning the aid scheme implemented by Belgium in favour of coordination centres established in Belgium is suspended insofar as it prohibits the Kingdom of Belgium from renewing coordination centre authorisations effective as at the date of notification of the decision.

2. The effects of renewals made pursuant to this order shall not extend beyond the day on which judgment is given in the main action.

…’

54. Cases C-182/03 and C-217/03 were joined for the purposes of the oral procedure and the judgment. The parties presented oral argument at the hearing on 14 September 2005.

D – Facts subsequent to the Commission Decision

55. First, the Commission carried out an investigation into the new tax scheme applicable to the coordination centres notified by the Kingdom of Belgium by letter of 16 May 2002.

56. By decision of 23 April 2003, the Commission approved the new scheme in so far as it provides for, in particular, prior authorisation for the coordination centres to be granted for a 10-year period and for the tax base to be calculated by reference to the sum of operating costs, coupled with a suitable profit margin. However, as the new scheme also incorporated an exemption for such centres from withholding tax and capital duty and provided that the ‘abnormal and gratuitous’ advantages granted to those centres fell outside the charge to tax, the Commission initiated the formal investigation procedure in relation to those three measures.

57. Following the initiation of that procedure, the Kingdom of Belgium undertook to withdraw the exemptions concerned and to replace them by other exemptions or reductions applying to all undertakings established in that country. It also undertook to bring all abnormal and gratuitous advantages received by the coordination centres within the charge to tax.

58. By a decision of 8 September 2004, the Commission held that, in the light of those undertakings, the measures constituting the new tax scheme applicable to the coordination centres did not constitute aid for the purposes of Article 87(1) EC. (20)

59. However, at the hearing on 14 September 2005, the representative of the Kingdom of Belgium stated that the Belgian authorities had been unable to obtain sufficient information from the Commission services to put the new scheme into practice and that it had ultimately been abandoned, as had been notified to the Commission by letter of 28 February 2005. He also indicated that the Kingdom of Belgium had opted for measures of general application, which had been adopted in the summer of 2005.

60. Secondly, the Kingdom of Belgium has adopted measures to benefit coordination centres having an approval which expired after the Decision of 17 February 2003.

61. By letter of 20 March 2003, the Minister for Finance of the Kingdom of Belgium notified the Commission, pursuant to Article 88(3) EC, of his intention to grant, until 31 December 2005, the benefit of tax measures similar to those laid down under the scheme for coordination centres to centres having an approval which expired between 17 February 2003 and 31 December 2005.

62. The Kingdom of Belgium also asked the Council, by letter of the same date, to declare those measures compatible with the common market in accordance with the third subparagraph of Article 88(2) EC.

63. By letter of 25 April 2003, the President of the Commission replied to the Belgian Minister for Finance that the Decision of 17 February 2003 had taken effect, that it was not open to Belgium to suspend its application and that, since the decision expressly governed the grant and renewal of benefits under the tax scheme at issue, the letter of 20 March 2003 could not be considered as notification of new aid for the purposes of Article 88(3) EC.

64. By letter of 26 May 2003, the Kingdom of Belgium again notified the Commission that it intended to take the measures set out in its letter of 20 March 2003. By letter of the same date, it also asked the Council to declare the proposed measures compatible with the common market in accordance with the third subparagraph of Article 88(2) EC.

65. At its meeting of 3 June 2003, the ‘Ecofin’ Council gave agreement in principle to that request and instructed the Committee of Permanent Representatives to the take all measures necessary to allow the Council to adopt the proposed decision at the earliest opportunity, and, in any event, before the end of June 2003.

66. By letter of 17 July 2003, the Commission, in reply to the notification given by the Kingdom of Belgium by letter of 26 May 2003, confirmed its reply of 25 April 2004, without prejudice to the interim order of 26 June 2003.

E – The Council Decision

67. In its Decision of 16 July 2003, the Council notes the legal and factual background to the request from the Kingdom of Belgium to authorise the proposed measures relating to the coordination centres having an approval which expired between 17 February 2003 and 31 December 2005.

68. In that context, it states that the Commission had held in 1987 and 1990 that the tax scheme applicable to the coordination centres introduced by Royal Decree No 187 did not give grounds for objection. It refers to the circumstances leading that institution to undertake a further investigation into that scheme and describes the terms of the Decision of 17 February 2003. The Council also notes that at its meeting of 26 and 27 November 2000 proposals were approved whereby undertakings benefiting from a harmful tax scheme as at 31 December 2000 could continue to do so until 31 December 2005 and that it reserved the right to grant an extension beyond that date in order to take account of special circumstances.

69. The Council next states that the centres referred to in the application by the Kingdom of Belgium hold temporary approvals, which, by virtue of Royal Decree No 187, were renewable, that if the proposed measures were not to proceed those centres might be obliged to cease operating in Belgium and that such a cessation of activities would have very negative economic and social repercussions for that Member State.

70. The Council also mentions that the Commission provided in its decision for the effects of the tax scheme applicable to the coordination centres to be maintained in the case of approvals expiring after 31 December 2005 and that other decisions of the Commission specified time-limits of up to 31 December 2010 for competitive tax schemes of other Member States, so that the application of the particular measures proposed by the Kingdom of Belgium should not give rise to potential distortions of competition that were disproportionate having regard to the anticipated advantages.

71. The Council concludes from that that exceptional circumstances indeed exist to justify giving the Kingdom of Belgium leave to grant, until 31 December 2005, the benefit of the proposed tax measures to coordination centres having an approval in force as at 31 December 2000 and an approval which expires between 17 February 2003 and 31 December 2005.

72. In the light of those factors, the Council adopted the following decision:

‘Article 1

The aid which Belgium plans to grant in the period up to 31 December 2005 to undertakings authorised as at 31 December 2000 to act as coordination centres under Royal Decree No 187 of 30 December 1982, and whose authorisations expire between 17 February 2003 and 31 December 2005, shall be considered compatible with the common market; by way of derogation from the general rules on taxation, it involves:

– application of the normal corporate tax rate to a theoretical tax base corresponding to a variable percentage of certain operating costs (the “cost-plus” method). However, an alternative tax base is used if it exceeds the tax base resulting from application of the “cost-plus” method; this alternative tax base includes the abnormal or benevolent advantages received by the centres and non-deductible expenses,

– application of a special annual tax of EUR 10 000 per employee, with a ceiling of EUR 100 000,

– exemption from the précompte immobilier (property tax) on buildings owned by the centres which they use for their professional activity,

– exemption from précompte mobilier ( withholding tax) on dividends, interest and royalties paid by the centres except, in the case of interest, where the beneficiary is subject to tax on natural persons or to tax on legal persons,

– exemption from withholding tax on the income with the centres receive a their cash deposits,

– exemption from the 0.50 % registration tax on subscriptions of capital and on increases in authorised capital.

– …’

F – Procedure before the Court against the Council Decision

73. By application of 24 September 2003, the Commission brought an action for the annulment of the Council Decision before the Court.

74. The Council lodged its defence on 16 December 2003, the Commission lodged its reply on 27 February 2004 and the Council lodged its rejoinder on 18 May 2004.

75. After the end of the oral procedure, the Court delivered its judgment of 29 June 2004 in Commission v Council , (21) in which it held that the Council no longer had the power to authorise, on the basis of the third subparagraph of Article 88(2) EC, the grant to the beneficiaries of unlawful aid which has been declared to be incompatible with the common market by a decision of the Commission of an amount designed to compensate for the repayments which they are required to make pursuant to that decision. (22)

76. The parties made their submissions as to the consequences to be drawn from that judgment in the context of the present action at the hearing on 14 September 2005.

V – The actions

77. I shall start by considering the action brought by the Commission against the Council Decision.

A – The action against the Council Decision (Case C‑399/03)

1. Forms of order sought and pleas in law

78. The Commission claims that the Council Decision should be annulled and that the latter should be ordered to pay the costs.

79. In support of its application, it raises three pleas in law alleging, first, a lack of competence on the Council’s part, secondly, misuse of powers and abuse of process and, thirdly, infringement of the Treaty and the general principles of Community law and, in the alternative, a manifest error of assessment as to the existence of exceptional circumstances.

80. It argues that the first plea is well founded in the light of the judgment in Commission v Council . It states that the objective of the Council Decision is to maintain in place the tax scheme at issue which it has held to be incompatible with the common market and that it does not relate to a new aid scheme or to individual measures, as the Council contends.

81. It also submits that the Council was no longer competent, rationae temporis, to adopt the Decision of 16 July 2003, as Article 88(2) EC allowed it a period of three months in which to determine its position and that the date on which the Kingdom of Belgium notified the Council of the aid in question should be set at 20 March 2003.

82. The Council’s primary contention is that the action should be dismissed and it contends, in the alternative, that its decision should be maintained in force until the date on which the Court delivers its judgment. It also maintains that the Commission should be ordered to pay the costs.

83. The Council submits that the solution adopted in the judgment in Commission v Council cannot be applied to the these proceedings since, in the present case, it authorised new aid, which was not the same as that in relation to which the Commission had given a ruling.

84. It states that the fact that an aid scheme has been held to be incompatible does not prevent the Member State concerned from granting new aid to the undertakings which might have benefited from the previous scheme, as indeed Regulation No 659/1999 expressly provides.

85. It argues that the aid authorised in its decision is not the same as the tax scheme applicable to the coordination centres classified by the Commission as State aid incompatible with the common market for the following reasons: first, at a formal level, it was introduced by different statutory provisions; secondly, unlike the former tax scheme, it applies to a limited number of identifiable undertakings, that is to say the 30‑odd coordination centres having an approval which expires between 17 February 2003 and 31 December 2005; lastly, its decision has no effect beyond 31 December 2005.

86. The Council submits that the fact that the Commission declared the tax scheme applicable to the coordination centres to be incompatible with the common market does not preclude the Kingdom of Belgium granting to certain centres tax advantages similar to those provided for by the previous scheme.

87. The Council goes on to state that its decision is not intended to overturn the effects of the Commission Decision. As the Commission has declared that the tax scheme applicable to the coordination centres henceforth constitutes State aid, the Council and the Commission are entitled to authorise aid measures if they form the view that the circumstances justify them.

88. As regards, lastly, the period which elapsed between the application by the Kingdom of Belgium and the Decision of 16 July 2003, the Council has argued that the letter of the Permanent Representative of Belgium to the European Union of 20 March 2003 is only a preparatory document, intended to facilitate translation, in order that discussions on the proposed measures might take place. The application of the Kingdom of Belgium was accordingly not submitted to it until 26 May 2003.

2. Appraisal

89. Having regard to the analysis of the division of powers in State aid matters between the Council and the Commission adopted by the Court in Council v Commission , which was a judgment of the Full Court, I am of the opinion that the plea alleging lack of competence by the Council to adopt the Decision of 16 July 2003 is well founded.

90. In support of my analysis, I shall start by noting the facts and the reasoning of the Court in that judgment.

91. In 1994 and 1999, the Portuguese Republic introduced various aid schemes in favour of a number of agricultural undertakings in the form of credits, moratoria on the repayment of borrowings and loans at favourable rates. The Commission held that aid to be incompatible with the common market, in whole or in part, and ordered that it be repaid by the beneficiaries, together with interest on the sums due.

92. Following the decisions of the Commission, the Portuguese Republic requested the Council, on the basis of the third subparagraph of Article 88(2) EC, to authorise it to grant aid to the Portuguese farmers obliged to repay that aid. The new aid was of the same amount as the sums due.

93. The Council granted that request. (23) It stated that repayment of the aid granted by the Portuguese Republic would threaten the economic viability of a number of beneficiaries and would have extremely damaging social effects in certain regions of that Member State. (24) It concluded from that that exceptional circumstances existed, within the meaning of the third subparagraph of Article 88(2) EC, justifying the authorisation of the proposed measure.

94. The Commission brought proceedings for the annulment of that decision before the Court, in which it invoked, inter alia, a plea that the Council was not competent to take such a decision.

95. In its appraisal of that plea, the Court adopted a two-stage reasoning. First, it defined the scope of the third subparagraph of Article 88(2) EC, which lays down the powers of the Council in matters of State aid. It stated that that provision was exceptional in character, as Articles 87 EC and 88 EC reserve a central role for the Commission in determining whether aid is incompatible.

96. It also concluded from the third and fourth subparagraphs of Article 88(2) EC that, if the Member State concerned has made no application to the Council before the Commission declares the aid in question to be incompatible with the common market, the Council is no longer authorised to exercise the exceptional power conferred on it by the third subparagraph in order to declare such aid to be compatible with the common market. (25)

97. It added that such an interpretation, which avoids the same State aid being the subject of contrary decisions taken successively by the Commission and the Council, contributes to legal certainty.

98. Secondly, the Court held that the limitation thus imposed on the Council’s powers implies that it also lacks the power to rule on an aid measure having the aim of allocating to beneficiaries of the unlawful aid declared to be incompatible by a Commission decision an amount designed to compensate for the repayments which they are obliged to make pursuant to that decision.

99. It stated that it had consistently been held that the abolition, by means of recovery, of State aid which has been unlawfully granted is the logical consequence of its being found to be unlawful, since the aim of obliging the Member State granting it to abolish aid is to restore the previous situation and that objective is obtained once the aid in question, increased where appropriate by default interest, has been repaid by the recipient.

100. It concluded from that that to hold that a Member State may grant to beneficiaries of unlawful aid, which has been declared to be incompatible with the common market by a decision of the Commission, new aid in an amount equivalent to that of the unlawful aid, intended to neutralise the impact of the repayments which the beneficiaries are obliged to make pursuant to that decision, would clearly amount to thwarting the effectiveness of decisions taken by the Commission under Articles 87 EC and 88 EC.

101. The Court stated that, in the same way that the Council cannot paralyse the effectiveness of a decision of the Commission finding aid to be incompatible with the common market by itself declaring the aid compatible with the common market, nor can the Council thwart the effectiveness of such a decision by declaring compatible with the common market, in accordance with the third subparagraph of Article 88(2) EC, aid designed to compensate the beneficiaries of the unlawful aid declared to be incompatible for the repayments they are required to make pursuant to that decision. (26)

102. The application of those rules in the present case leads to the conclusion that the Council could not validly adopt the Decision of 16 July 2003.

103. It was only after the Decision of 17 February 2003 that the Kingdom of Belgium brought an application before the Council under the third subparagraph of Article 88(2) EC. Accordingly, the effect of the judgment in Commission v Council (27) is that the Council was no longer authorised to exercise the exceptional power conferred on it by that provision in order to declare compatible with the common market the national scheme which the Commission had declared to be incompatible in that decision. Similarly, the judgment provides that the Council could not thwart the effectiveness of that decision.

104. Contrary to what the Council maintains, I am of the opinion that in adopting its Decision of 16 July 2003 it infringed both those rules.

105. Thus, a comparison of the measures described in Article 1 of the Council Decision and in the letters from the Kingdom of Belgium of 28 March and 26 May 2003 shows that the content of those measures is the same as those laid down under the tax scheme applicable to the coordination centres which was the subject of the Commission Decision. The measures authorised by the Council involve the application of the same method for determining taxable benefits, together with liability for the same tax in respect of the number of employees as in the tax scheme applicable to the coordination centres. They also comprise the same exemptions from withholding tax, property tax and capital duty.

106. It should next be noted that the measures referred to in the Council Decision are authorised for the benefit of the coordination centres having rights on 31 December 2000 under the tax scheme declared to be incompatible with the common market and having an approval which expired between 17 February 2003 and 31 December 2005. Those measures are accordingly authorised for the benefit of undertakings which had rights under the aid scheme declared to be incompatible by the Commission Decision and which, under that decision, could not obtain a renewal under that scheme.

107. Lastly, it is clear from the statement of reasons in the Council Decision that its object is to overcome the effects of the Commission Decision as regards the coordination centres having an authorisation which expired between 17 February 2003 and 31 December 2005. (28)

108. In so authorising the Kingdom of Belgium to treat the coordination centres having an approval expiring between 17 February 2003 and 31 December 2005 in the same way for tax purposes as under the scheme which was declared to be incompatible by the Commission in its Decision of 17 February 2003 in order to overcome the inability to renew that scheme for the benefit of those centres, the Council did indeed rule on the compatibility of a scheme in relation to which the Commission had already adjudicated and it did indeed seek to negate the effects of that decision in their regard.

109. None of the arguments relied on by the Council appears to me to be capable of calling that analysis into question. Thus, the fact that the measures authorised by the Council were based, in terms of form, on new legislative provisions enacted by the Kingdom of Belgium and not on a request that the effects of the tax scheme introduced by Royal Decree No 187 be extended justifies their being treated as separate measures. It is plain that the division of powers between the Council and the Commission laid down by the Court in its judgment in Commission v Council could be easily circumvented and the effectiveness of a decision of incompatibility could be largely undermined if it were to be sufficient for the Member State concerned to reproduce in identical terms, in new legislation, the provisions of an aid scheme declared to be incompatible with the common market and to submit it to the Council.

110. In the light of the judgment in Commission v Council , it is necessary to have regard to the effects of the measures to which the decisions taken by the Commission and thereafter by the Council relate in order to determine whether the latter acted within the scope of the powers conferred on it by the third subparagraph of Article 88(2) EC.

111. Similarly, the arguments that the Council Decision covers only a precise and determined number of undertakings and has effects which are limited as to time do not justify the conclusion that the Council was entitled to authorise the measures concerned on the basis of the third subparagraph of Article 88(2) EC.

112. As the reasoning set out in the judgment in Commission v Council makes clear, the object of the division of powers between the Council and the Commission in matters of State aid is to contribute to legal certainty by avoiding the same aid being the subject of contrary decisions taken successively by those institutions. (29) Where the Commission has declared aid to be incompatible with the common market, it is for the Member State and the beneficiaries of that measure to make use of the means of obtaining redress before the Community judicature and the national courts in order to challenge, directly or indirectly, that decision. Legal certainty also requires that, where the Commission’s decision has become final, it cannot be annulled by a Council Decision. Lastly, it is necessary to avoid any conflict between a decision of the Council and a judgment of the Community Courts delivered in relation to the previous decision of the Commission.

113. Having regard to those objectives, the determinative criterion is whether the Council Decision is, or is not, in conflict with the Commission Decision or deprives it of all effect. It is therefore of little relevance that the Council Decision applies to a smaller number of undertakings than the Commission Decision or that the measures it authorises have a shorter duration than the tax scheme declared to be incompatible by the Commission. In the present case, it is sufficient to note that Article 2 of the Commission Decision provides that, as of the date of its notification, the benefits of the scheme in question may no longer be extended by the renewal of existing agreements (second paragraph) and that, if the approval is to expire before 31 December 2010, the benefits of the scheme may no longer be granted, even temporarily (third paragraph).

114. It follows that the Council no longer had the power to authorise the Kingdom of Belgium to grant to its centres a tax treatment that was the same as that declared to be incompatible by the Commission. I am therefore of the opinion that the first plea relied on by the Commission, alleging lack of competence on the Council’s part to adopt the Decision of 16 July 2003, is well founded and that the latter should accordingly be annulled.

115. In the light of the foregoing, I therefore propose that the Court should annul the Council Decision, without it being necessary to consider the other pleas relied on by the Commission in support of its application. The Council, which is the unsuccessful party to this action, should pay the costs.

116. The Council requests that, should its Decision of 16 July 2003 be annulled, its effects be maintained in force until the date on which the Court’s judgment is delivered.

11 7. I do not consider that that request should be granted for the following reasons. The object of the division of powers in State aid matters laid down under Article 88 EC is, as mentioned above, to avoid conflict, not only between the Commission and the Council in relation to the same national measure, but also between the Council and the Community Courts when the latter rule on an application for the annulment of a Commission decision.

118. In the present case, the Decision of 17 February 2003 is the subject of an action brought by each of the Kingdom of Belgium and Forum 187. The object of the application brought by the Member State is the annulment of the decision in so far as it prohibits the renewal of the approvals expiring after 17 February 2003. It is also the case that the Kingdom of Belgium and Forum 187 have, by virtue of the interim order of 26 June 2003, been granted an order for the suspension of the operation of the Commission Decision in so far as it prohibits any renewal of approvals from that date. It follows that, by virtue of that order, the Kingdom of Belgium may renew the approval granted to those centres having an approval which expires after 17 February 2003. That order therefore has effects which are similar to those of the Council Decision because, as mentioned above, the tax measures covered by the latter are the same as those laid down under the tax scheme applicable to the coordination centres.

119. That being the case, the Council has no interest in requesting that the effects of its decision be maintained until the Court delivers its judgment if the Court grants the applications brought by the Kingdom of Belgium and Forum 187.

120. If, on the other hand, the Court rejects those applications and negates the effects of the interim order, it would be illogical and contrary to the division of powers laid down under Article 88 EC to provide that the Council Decision is to be effective until the Court delivers its judgment. In so far as that judgment cannot, in fact, be delivered before 31 December 2005, such an approach would mean that the annulment of the Council Decision becomes pointless.

B – The actions against the Commission Decision (Joined Cases C‑182/03 and C‑217/03)

1. Forms of order sought

a) Case C-182/03 Belgium v Commission

121. The Kingdom of Belgium asks the Court to annul the Commission Decision in so far as it does not authorise it go grant, even temporarily, renewal of ‘coordination centre status’ to those centres which benefited from it on 31 December 2000.

122. It application seeks the annulment of the second and third paragraphs of Article 2 of the Commission Decision in so far as that article provides that ‘as of the date of notification of this Decision, the benefits of this scheme or sections thereof may no longer be … maintained by renewing existing agreements’ and that ‘in accordance with the second paragraph, if approval is renewed prior to [31 December 2010] the benefits of the scheme dealt with in this Decision may no longer be granted, even temporarily’. (30)

123. That Member State also asks that the Commission be ordered to pay the costs, including those relating to the interlocutory proceedings.

124. In the document of 9 May 2003, lodged following the corrigendum of 23 April 2003, the Kingdom of Belgium raised two new pleas in law, directed against that corrigendum. The first of those pleas alleged infringement of the principle of legal certainty by reason of the difficulties of interpretation which, according to that Member State, the new wording of the third paragraph of Article 2 of the Decision of 17 February 2003, as amended by that corrigendum, continued to give rise to. However, in the light of the explanations provided by the Commission in its defence as to the meaning of that article and the scope of the interim measures which it lays down, the Kingdom of Belgium expressly withdrew that new plea in its reply. (31) It is therefore unnecessary to consider that plea.

125. The second of those new pleas involves the circumstances in which the corrigendum was adopted. In that plea, the Kingdom of Belgium stated that it had serious doubts as to the propriety of the procedure under which that document was adopted. It also expressly reserved the right to challenge its validity. It argued that it was for the Commission to indicate the decision-making procedure under which the measure had been taken and to supply evidence that it had been attached to the summary note or the day-note, as the case may be, provided for in Article 18 of the Rules of Procedure of the Commission. (32) Failing that, it would be the task of the Court to prescribe the measures of inquiry, by order made pursuant to Article 45 of its Rules of Procedure, which it considered appropriate, while reserving the applicant’s rights.

126. In its defence, the Commission argued that the corrigendum of 23 April 2003 had had the same official authentification seals applied to it as the original version of the Decision of 17 February 2003. It also maintained that that measure had been adopted under the oral procedure at the meeting of the College of 23 April 2003, and was fully compliant with its rules of procedure.

127. It should be pointed out that in its additional application the Kingdom of Belgium did not ask for the annulment of the corrigendum, but merely reserved the right to challenge its validity at a later stage. It therefore did not bring an actual application before the Court, pursuant to Article 38 of the Rules of Procedure.

128. I should also note that the Kingdom of Belgium has given no reason to believe that the corrigendum was adopted without regard to the Rules of Procedure of that institution and that it is accordingly vitiated by an infringement of its essential procedural requirements. The Kingdom of Belgium does no more in that regard than refer to the fact that the document was a corrigendum. However, the explanations provided by the Commission show that the measure followed the same adoption procedure as the original version of 17 February 2003. (33) Support for that position is to be found in the fact that the Commission’s letter of 23 April 2003 and the corrected version of the Decision of 17 February 2003 bear the same authentification seals as the original version of the decision. Lastly, it appears that neither in its reply nor in the oral procedure did that Member State maintain its challenge to the propriety of the procedure followed for the adoption of that corrigendum.

129. I am therefore of the opinion that the second new plea put forward by the Kingdom of Belgium in its additional application is not admissible, as it is not raised in support of an application or, alternatively, that it should be rejected.

130. In the light of the foregoing, the matter brought before the Court by the Kingdom of Belgium is thus an application for partial annulment of the Commission Decision, in so far as it does not authorise it to renew, even temporarily, the approvals of the coordination centres which benefited from the scheme in question on 31 December 2000 and had an approval which expired before 31 December 2010.

131. The Commission contends that that application should be rejected and that the Kingdom of Belgium should be ordered to pay the costs, including those relating to the interlocutory procedure.

b) Case C-217/03 Forum 187 v Commission

132. In its application received at the Registry of the Court of First Instance on 30 April 2003, Forum 187 asked that Court to annul the Decision of 17 February 2003 in whole or in part.

133. By that application, Forum 187 seeks primarily the annulment of that decision in its entirety, in particular in so far as Article 1 of the decision holds the tax scheme applicable to the coordination centres to be State aid incompatible with the common market. It also seeks, in the alternative, partial annulment of the Commission Decision inasmuch as it failed to lay down adequate transitional measures.

134. In its original application, Forum 187 complained that the Commission had failed to adopt transitional measures in relation to, first, coordination centres having an approval which was renewed between 31 December 2000 and 17 February 2003 and, secondly, those having an approval which expired after 17 February in 2003 and in 2004. However, following the correction of Article 2 of the Decision of 17 February 2003, Forum 187 withdrew its application as regards the centres having an approval which was renewed between 31 December 2000 and 17 February 2003. (34)

135. Lastly, Forum 187 seeks an order that the Commission pay the costs of Cases C-217/03 and T-276/02. (35)

136. Following the corrigendum of the Decision of 17 February 2003, Forum 187 lodged at the Court an additional application of 16 May 2003, in which it stated that the Commission’s error in the wording of Article 2 of the decision had led it to put forward arguments which were no longer relevant. It asked that that institution be ordered to bear the costs thereby occasioned, whatever the result of the action for annulment might be.

137. The Commission contends that the Court should reject the action brought by Forum 187 as being manifestly inadmissible and, in the alternative, unfounded. It also contends that Forum 187 should be ordered to pay the costs.

138. I shall start by considering the plea of inadmissibility raised by the Commission against the action brought by Forum 187.

2. The admissibility of the action brought by Forum 187

a) Arguments of the parties

139. The Commission submits that Forum 187 does not have locus standi to challenge the Decision of 17 February 2003, which is not addressed to it, since it is not directly and individually concerned by the decision.

140. It states that an association such as Forum 187, which was constituted in order to protect the collective interests of a category of persons, cannot be individually concerned by a measure affecting the general interests of that category. Forum 187’s application could be admissible only if that association were to show that its own interests are affected by the Decision of 17 February 2003, or that it is acting as representative of a number of its members who themselves would have locus standi .

141. As regards the first point, the Commission argues that Forum 187 cannot claim to be directly and individually concerned by the Decision of 17 February 2003 by reason of its position in relation to the Belgian authorities and its participation in the administrative procedure leading to the decision.

142. It states that, according to the judgment in Arbeitsgemeinschaft Deutscher Luftfahrt-Unternehmen and Hapag-Lloyd v Commission , (36) the mere fact that Forum 187 has submitted observations on behalf of its members during that procedure is not in itself sufficient to confer the requisite locus standi on it. It maintains that it has never recognised Forum 187 as being entitled to conduct negotiations on behalf of its members, nor does that association enjoy any official or quasi-official status with the Belgian authorities. The position of Forum 187 is thus different from that of the association involved in the facts leading to the judgment in AIUFFASS and AKT v Commission , (37) which was in a unique situation in the textile industry sector. Nor is the position of Forum 187 similar to that of the Landbouwschap, whose action was declared to be admissible in Van der Kooy and Others v Commission (38) and which had negotiated with the Netherlands Government the preferential gas tariff held to be State aid incompatible with the Treaty.

143. The Commission also states that Forum 187 cannot claim that the Decision of 17 February 2003 threatens its raison d’être , since the decision does not require in any way that the activities of the coordination centres in Belgium should cease.

144. As regards the second point, the Commission argues that its decision covers an aid scheme which is available to a category of undertakings and not a group of individual measures granting aid to one or more undertakings identified by name. It is therefore a measure of general application which applies to objectively determined situations and which has legal effects in relation to categories of persons denoted in the abstract. The Commission contends that the decision also does not apply to a closed class of persons, the number and identity of which are known or can be ascertained, but to all undertakings, present, past and future, which may have been entitled to claim the benefits of the tax scheme applicable to the coordination centres.

145. The Commission states that Forum 187 does not refer to any feature which would lead to the conclusion that some of its members are concerned ‘by reason of certain attributes peculiar to them, or by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually just as in the case of the person addressed’, to adopt the wording which has been used since Plaumann v Commission . (39) An undertaking which currently manages a coordination centre or which contemplates setting up such a centre in the future would be affected by the Commission Decision only by virtue of its objective status as a current or potential beneficiary of the tax scheme at issue, so that it is not directly and individually concerned by the Decision of 17 February 2003.

146. Moreover, none of the members of Forum 187 was given special treatment by either the Belgian authorities, when the scheme was introduced, or by the Commission, when it was investigated. The position of the members of Forum 187 differs from that of the beneficiaries of individual aid granted under a sectoral scheme which they are obliged to repay, as was the case in CETM v Commission , (40) Italy and Sardegna Lines v Commission (41) and Italy v Commission . (42) In the present case, no member of Forum 187 had an existing and established right which was affected by the Decision of 17 February 2003. The Commission states in that regard that the transitional measures allowed all the coordination centres to benefit from their current approval until the date of its expiry, save for those having an approval which extended beyond 31 December 2010.

147. As regards more particularly the coordination centres having an approval which expired shortly after the Decision of 17 February 2003, their situation was no different from that of the other members of Forum 187, so that it could be could be said that they were distinguished individually in the same way as an addressee. Where a tax scheme provides a benefit that is limited as to time, it is inevitable that not all approvals will expire at the same point. The date on which such expiry occurs is an objective factor which shows that those centres are affected by a general measure and that such an effect may vary in its application. The Commission also points out that those centres did not have an established right to the renewal of their approval. The question whether they might have a legitimate expectation that their approval would be renewed is one which goes to the merits.

148. Lastly, the members of Forum 187 are not completely precluded from bringing proceedings, as they can challenge any measure taken by the national authorities which affects their tax position before the Belgian courts. They can challenge the validity of the Decision of 17 February 2003 in the context of those proceedings.

149. Forum 187 contests the plea of inadmissibility raised by the Commission and submits that its application should be held to be admissible on two grounds. First, a number of its members are directly and individually concerned by the Commission Decision. These comprise, first, the 30 centres which had their approval renewed during 2001 and 2002 and for which the period during which they may benefit from the tax scheme at issue is restricted to 31 December 2010. Secondly, they comprise the eight centres having an application for renewal which was pending when the Commission Decision was adopted and which cannot, because of it, benefit from such an application. (43)

150. Forum 187 secondly submits that it is affected by the Commission Decision as it is the representative body for the coordination centres which is recognised by the Belgian authorities, with which it has a quasi-official status, as is evidenced by the documents annexed to its reply to the plea of inadmissibility. It collaborated closely with those authorities when the Commission and the Code of Conduct Group investigated the tax scheme applicable to the coordination centres and the Belgian Government regularly asked it to inform its members of changes in the situation. Forum 187 is therefore individually concerned by the Commission Decision, in accordance with the principles laid down by the Court in Van der Kooy and Others v Commission.

151. Forum 187 adds that it is individually concerned by the Commission Decision since the decision affects its raison d’être . Thus, in the absence of any replacement tax scheme, a large number of coordination centres will be obliged to ask themselves whether they wish to remain in Belgium.

152. Forum 187 lastly claims that it played an important part in the administrative procedure before the Commission and that the latter informed it directly of its decision.

b) Appraisal

153. As was stated at the hearing and as is clear from case-law, an association such as Forum 187, which is responsible for protecting the collective interests of undertakings, is, as a matter of principle, entitled to bring an action for annulment against a final Commission Decision in matters of State aid only in two cases. Its application is admissible, first, where the undertakings which it represents or some of those undertakings themselves have locus standi . (44) The association is then considered to be acting in place of its members. Secondly, its action is also admissible if it can prove an interest of its own in bringing the action. Case-law recognises that such a situation may arise where, in particular, the association’s position as negotiator has been affected by the measure which it is sought to annul. (45)

154. That delineation of the admissibility of an action brought by an association for the protection of collective interests before the Community Courts flows from the fourth paragraph of Article 230 EC, which makes an action for annulment brought by natural or legal persons against a decision which is not addressed to them subject to the requirement that it concern them both directly and individually. If the measure in question does not satisfy those requirements, an action to challenge it by a natural or legal person is inadmissible. Furthermore, each of those necessary requirements involves a question of public policy, so the Community judicature must raise the inadmissibility of its own motion. (46)

155. An association for the protection of collective interests is therefore not entitled to seek the annulment of a decision which is not addressed to it unless that decision concerns it or its members directly and individually. It follows that, in accordance with settled case-law, an association is not entitled to bring proceedings against such a measure for the benefit of the general and collective interests of the undertakings which it represents. (47) It is thus a question of preventing parties being able, through the creation of such an association, to circumvent the requirements of the fourth paragraph of Article 230 EC. (48)

156. It is in the light of those considerations that the admissibility of the action for annulment brought by Forum 187 against the Commission Decision should be appraised. For that purpose, I shall start by considering whether the action brought by that association is admissible on the basis that it is affected by that decision in terms of its own interests.

i) The admissibility of the action brought by Forum 187 on the basis that it is itself directly and individually concerned

157. Forum 187 maintains that it is individually concerned by the Commission Decision because, first, its position as negotiator was affected by that decision and, secondly, the decision threatened its very existence. I am of the opinion that Forum 187’s arguments cannot be accepted as regards either of these points.

158. As regards, first, the impact on its position as negotiator, it should be noted that this criterion was laid down by the Court in its judgment in Van der Kooy and Others v Commission , the facts of which are highly unusual.

159. Thus, the Court held in relation to the circumstances which gave rise to that judgment that the decision given by the Commission classifying preferential tariffs for the supply of gas for glasshouse growers as State aid incompatible with the common market affected the position as negotiator of the Landbouwschap, the body established under Netherlands public law responsible for protecting the interests of operators in the agricultural sector, not only because that body had actively participated in the formal investigation procedure initiated by the Commission, but also because it had negotiated those tariffs with the supplier, with, moreover, its signature appearing on the agreement establishing those tariffs and that, following the Commission’s decision, it had been obliged to undertake fresh negotiations and to enter into a fresh agreement. Accordingly, the Landbouwschap had, in effect, jointly participated in the framing of the national scheme at issue.

160. In CIRFS and Others v Commission , the Court also accepted that an application brought by an association was admissible, where the latter’s position as negotiator was affected in a different way. In that case, the matter before the Court was an action brought by the CIRFS, an association whose membership consisted of the main international producers of synthetic fibres against a decision in which the Commission had held that aid granted by a Member State did not require to be the subject of prior notification because that aid did not fall within the scope of the ‘discipline’ agreed to by the Member States in relation to aid to the Community synthetic fibre industry, which was set out in a Commission notice.

161. The Court held that the position of the CIRFS as negotiator was affected because that association had pursued, in the interest of the main international producers of synthetic fibres, a number of actions connected with the policy of restructuring that sector of activity and that it had, in particular, acted as the Commission’s interlocutor with regard to the introduction of the discipline relating to the conditions for the grant of State aid and its extension and adaptation. The CIRFS had thus actively participated in the development of the discipline setting out the rules for the grant of aid in the sector concerned.

162. As the Court has recently confirmed in Commission v Aktionsgemeinschaft Recht und Eigentum , (49) participation in the formal investigation procedure in order to protect the collective interests of the operators which an association represents does not prove that the latter is affected by the decision in question in terms of its own interests. (50) The position as negotiator of such an association is to be considered as affected if, and only if, it participated actively in the investigation adoption of the national measure in question, as was the case in Van der Kooy and Others v Commission , or the legal rules under which it was enacted, as the CIRFS had done in relation to the discipline applying to the award of aid in the business sector concerned.

163. The matters relied on by Forum 187 does not establish that it participated at such a level. It is true that those matters show that it maintained contacts with the Belgian authorities in order to ensure the proper application of the tax scheme in question. However, that does not mean that it was involved in the determination of the content of the various measures laid down under the scheme at issue which were considered to be State aid by the Commission. It neither negotiated nor signed any agreement establishing the tax scheme applicable to the coordination centres. Nor, in order to give effect to the contested decision, did it initiate fresh negotiations or conclude a new agreement concerning those provisions. (51) I am accordingly of the view that it cannot be affected by the Decision of 17 February 2003 in its ‘position as negotiator’.

164. As regards, next, the argument that the Commission threatened the very existence of Forum 187, were that argument to be well founded it could lead to that association’s application being found to be admissible, because its own interests would then be affected. However, I am of the view that that argument is not be well founded in the present case for the following reasons.

165. Forum 187 submits that the effect of the Commission Decision is that, in the absence of a replacement scheme, the coordination centres will be forced to cease their activities in Belgium. As the Commission points out, its Decision of 17 February 2003 does not prohibit the carrying on by those centres of their activities in Belgium, nor does it impose any restrictions on those activities. It extends only to the tax scheme applying to those centres and does not prevent the Kingdom of Belgium from establishing a replacement tax scheme. Furthermore, Forum 187 argues in its second plea, alleging infringement of Article 87(1) EC, that the various tax measures laid down by the scheme in question and classified as ‘State aid’ by the Commission do not confer any economic advantage on those centres. That being the case, it is thus difficult to accept that the abolition of that tax scheme will lead all the coordination centres or a significant number of them to cease their activities in that Member State.

166. I am therefore of the opinion that Forum 187 is not individually concerned by the Decision of 17 February 2003 by virtue of being affected by it as regards its own interests.

167. It is necessary at this point to consider whether the application for annulment brought by Forum 187 is admissible on the ground that some of its members themselves have locus standi to bring such an action before the Community Courts.

ii) The admissibility of the application brought by Forum 187 on the ground that it is acting in place of some of its members

168. Forum 187 submits that its application should be held to be admissible since it represents two groups of coordination centres which are directly and individually concerned by the Commission Decision. Those groups comprise, first, 30 centres having an approval which was renewed in 2001 or 2002 and for which that decision limits the period of application of the tax scheme in question to 31 December 2010 and, secondly, eight centres which had a pending application for renewal and which are, by virtue of that decision, prevented from obtaining such a renewal.

169. As the Court expressly confirmed in Codorniu v Council , (52) the fact that a Community measure has a general sphere of application does not prevent it from being of direct and individual concern to certain traders and thus constitute a decision in their regard. The fact, in the present case, that the Commission Decision is, in relation to traders, to be regarded as a measure of general application, inasmuch as it holds the tax scheme applicable to the coordination centres, that is to say to a category of traders referred to in a general and abstract manner, to be incompatible with Community law, does not prevent it from being of direct and individual concern to some of those centres by reason of their own characteristics.

170. There is no challenge on the Commission’s part in relation to the first condition laid down by the fourth paragraph of Article 230 EC, which requires that the centres belonging to the two groups represented by Forum 187 must be directly concerned by the Decision of 17 February 2003. I am also of the opinion that that condition is satisfied. It is clear from case-law that natural or legal persons who are concerned by the contested measure are directly concerned by it where that measure leaves no discretion to its addressees who are entrusted with the task of implementing it, with such implementation being, in terms of the customary expression, ‘purely automatic and resulting from Community rules without the application of other intermediate rules’. (53)

171. That is indeed the case in these proceedings, since the Commission Decision, having declared the tax scheme applicable to the coordination centres to be incompatible with the common market, goes on to prohibit the Kingdom of Belgium from granting renewals to centres having an approval which expires after 17 February 2003 and provides that approvals renewed before that date cannot extend beyond 31 December 2010. The Belgian authorities thus have no discretion in the application of those provisions.

172. However, the issue in the present case is whether the centres belonging to the two groups referred to by Forum 187 fall to be considered as being individually concerned by the Commission Decision. It is therefore necessary to establish whether the criteria laid down by the Court in Plaumann v Commission and subsequently confirmed by established case-law, (54) those two groups are affected by the Decision of 17 February 2003 by reason of certain attributes peculiar to them, or by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and distinguishes them individually ‘just as in the case of the person addressed’.

173. As the Commission points out, the general sphere of application of a measure as regards certain traders is not called into question by the mere fact that they are affected to a greater extent than or in a different way from other traders. It is in the nature of a general provision that its uniform application may affect interested parties in different ways, depending on their precise situation. In the particular field of State aid, it is also settled case-law that an undertaking cannot, as a rule, contest a Commission decision prohibiting a sectoral aid scheme if it is concerned by that decision solely by virtue of belonging to the sector in question and being a potential beneficiary of the scheme. (55)

174. However, it is also clear from case-law that when the contested measure affects a group of persons which were identified or identifiable at the time when that measure was adopted and in accordance with criteria which are specific to the members of that group, the latter may be considered to be individually concerned by that measure, as members of a limited class of traders. (56)

175. An action brought by such persons has thus been declared to be admissible when the contested measure modifies the applicant’s rights retrospectively. The Court decided that point in its judgment in Toepfer and Getreide-Import v Commission , in which it accepted for the first time that a person could be individually concerned by a decision addressed to a Member State. (57) It also adopted that approach in its judgment in Bock v Commission , (58) and in its judgments in Agricola commerciale olio and Others v Commission and Savma v Commission . (59)

176. In its judgment in CAM v Commission , (60) the Court also accepted that the applicant had locus standi when the contested measure concerned situations which existed at the time of its adoption and denied the benefit of acquired rights in respect of future transactions. (61)

177. It follows that where rights previously acquired by individuals are affected by a Community measure, those individuals are entitled to challenge the lawfulness of that measure before the Community Courts.

178. In the light of that case-law, I am of the opinion that the coordination centres having an approval which was renewed during 2001 and 2002 should be held to be individually concerned by the Commission Decision.

179. Under the tax scheme in question, the renewal of the centres’ approval in 2001 or 2002 conferred on them the right to benefit from the application of that scheme for 10 years and that period was restricted by the Commission Decision to 31 December 2010. The rights acquired by those centres on the basis of the Belgian tax scheme and the previous decisions of the Commission, which provided that Community law in the field of State aid did not preclude that scheme, were therefore clearly reduced by the Decision of 17 February 2003.

180. Furthermore, the number of centres in such a position could be known at the time when the decision was adopted and cannot increase. They therefore plainly form a restricted class or a closed class of economic operators within the meaning of the case-law, who are particularly affected by the Commission Decision.

181. Lastly, the locus standi of those centres can also be inferred, in my opinion, from the judgments in Italy and Sardegna Lines v Commission and Italy v Commission . It was held in those cases that an undertaking to which aid had been granted under a sectoral scheme fell to be considered as individually concerned by a Commission decision declaring that aid scheme to be incompatible with the common market and ordering the recovery of sums paid under that scheme to each beneficiary. The Court held that such an undertaking was concerned by the decision not only as an undertaking in the sector of activities in question, being a potential beneficiary of the aid scheme at issue. It was also concerned by virtue of being the actual beneficiary of individual aid granted under that scheme. (62)

182. In my view, that case-law also applies to the present case. Just as with the applicants in the cases which led to the judgments referred to above, the coordination centres having an approval which was renewed in 2001 and 2002 and which was limited in time to 31 December 2010, are concerned by the Commission Decision not only as centres which potentially benefit from the tax scheme at issue. They are also concerned by virtue of being the actual beneficiaries of that scheme, upon renewal of their individual approval.

183. For all of the above reasons, I am of the opinion that the action brought by Forum 187 is accordingly admissible inasmuch as it represents the 30 centres having rights to benefit from the scheme at issue which were restricted in time to 31 December 2010.

184. That suffices to substantiate the admissibility of the action brought by Forum 187 for the annulment of the Decision of 17 February 2003 in so far as that decision holds that the tax scheme applicable to the coordination centres constitutes State aid incompatible with the common market.

185. However, Forum 187 also seeks the partial annulment of the Decision of 17 February 2003 in so far as the decision did not lay down transitional measures for the benefit of those coordination centres having an approval which expires after 17 February in 2003 or in 2004. Of the two groups of coordination centres which, according to Forum 187, are entitled to bring proceedings directly before the Community Courts, only the eight centres having an application for renewal which was pending when the Decision of 17 February 2003 was adopted have an interest to bring such an application.

186. The partial annulment of that decision in so far as it does not lay down transitional measures for the coordination centres having an approval which expires after 17 February in 2003 or in 2004 can be of no benefit to those centres having an approval which was renewed in 2001 or in 2002. An action for annulment brought by a natural or legal person is admissible only in so far as that person has an interest in the annulment of the contested measure, which presupposes that the action must be liable, if successful, to procure an advantage for the party who has brought it. (63) Moreover, the lack of interest in bringing proceedings constitutes an absolute bar to proceeding. (64)

187. The admissibility of that alternative claim by Forum 187 is accordingly subject to the condition that those eight centres also have locus standi . The fact that that claim for partial annulment of the Commission Decision is encompassed within the claim made by the Kingdom of Belgium, the admissibility of which is agreed and does not appear to be capable of being disputed, (65) does not mean that the matter does not require to be considered, should the primary claim by Forum 187 be rejected and should it accordingly be necessary to adjudicate on its alternative claim.

188. Were that to be the case, I am also of the opinion that the action brought by Forum 187 is admissible, since the coordination centres having an application for renewal which was pending at the time when the Commission Decision was notified clearly have locus standi to bring proceedings for the annulment of the decision before the Community Courts.

189. The admissibility of an action brought by the members of a group of persons which were identified or identifiable at the time when the contested measure was adopted and in accordance with criteria which are specific to the members of that group has been accepted where the Community law provision on which such a measure is based expressly obliged the institution which was its author to take into account the particular circumstances of the applicants. (66)

190. I am of the opinion that that case-law may be applied to the coordination centres having an application for renewal which was pending at the time when the Decision of 17 February 2003 was adopted.

191. First, those centres are clearly part of a closed class, as defined by case-law, the members of which are particularly affected by the Commission Decision. That decision provides that centres approved on 31 December 2000 and having an individual approval which was in place on 17 February 2003 may continue to benefit from it until its expiry or 31 December 2010, at the latest. It also provides that approvals expiring before 31 December 2010 may no longer be renewed, even temporarily. Those centres which were already approved on 31 December 2000 and having a ten-year approval expiring between 17 February 2003 and 31 December 2010 thus constitute a group which was clearly identifiable at the time when the Commission Decision was adopted and which cannot increase thereafter.

192. Furthermore, those centres are affected in a particular way, by comparison with the other coordination centres and all of the companies which could have established such centres. They are distinguished by the fact that they possessed a 10-year approval expiring between 17 February 2003 and 31 December 2010, that, in terms of the Belgian legislation referred to in the decisions of the Commission of 1984 and 1987, that approval was renewable and that, by virtue of the Commission Decision, it could not be renewed.

193. Secondly, as the judgment in Sofrimport v Commission makes clear (67) and as the Court confirmed in Antillean Rice Mills and Others v Commission , (68) the fundamental point to be determined in assessing whether persons who are affected in a particular way by a measure of general application are individually concerned by it is the protection which they are afforded under Community law. Forum 187 invokes the principle of the protection of legitimate expectations and argues that the coordination centres concerned had a legitimate expectation that their approval would be renewed.

194. I am in no doubt that a general principle such as the principle of the protection of legitimate expectations may protect the applicants in such a way as to distinguish them individually, as may an express provision of a measure of Community law on the basis of which the contested measures were adopted and which obliges the author of the measure in question to take account of their particular situation, as the Court accepted was the case in Piraiki-Patraiki and Others v Commission and Sofrimport v Commission . In my view, the protection guaranteed by a general principle is indeed a factor which is capable of distinguishing an applicant and of allowing him to bring an action for annulment directly before the Community Courts. (69)

195. It is true, as the Commission states, that the question whether the coordination centres could have a legitimate expectation in the renewal of their approval is the subject of a substantive challenge. However, it is my view that at the stage when the admissibility of the action is under consideration it is sufficient to note that, in its Decision of 17 February 2003, the Commission analysed, in the 117th to 120th recitals in the preamble, the nature of the legitimate expectation on which the coordination centres having an approval in force at the time when the decision was notified might rely. The fact that the Commission undertook such an analysis clearly shows that those centres benefited from a particular protection, by comparison with all the other coordination centres and companies of multinational groups which had contemplated the establishment of such centres, on the basis of the principle of the protection of legitimate expectations.

196. In my opinion, that point suffices to distinguish the coordination centres having an approval which expired between 17 February 2003 and 31 December 2010 from the other traders concerned by the Commission Decision. Those centres thus clearly constitute a closed class which is sufficiently distinguished from those other traders and to which the principle of the protection of legitimate expectations provides a particular protection, which they should be entitled to assert by bringing legal proceedings before the Community Courts.

197. I am therefore of the opinion that the second group of coordination centres which Forum 187 claims to represent in the present action should be recognised as having locus standi .

3. The merits of the actions

198. In so far as the action brought by Forum 187 is more extensive than that brought by the Kingdom of Belgium, as it seeks the annulment of the Decision of 17 February 2003 in its entirety, I shall start by considering that application.

199. If necessary, I shall next consider the applications by Forum 187 and the Kingdom of Belgium for the partial annulment of the Commission Decision, in so far as it failed to lay down transitional measures for those centres having an approval which expires after 17 February 2003.

a) The application by Forum 187 for the annulment of the Decision of 17 February 2003 in its entirety

200. In support of that application for annulment, Forum 187 invokes three pleas in law. In the first plea, it argues that that decision lacks any legal basis and infringes the principle of legal certainty, in that it is contrary to previous decisions taken more than 15 years ago. In its second plea, Forum 187 claims that, in classifying the tax scheme applicable to the coordination centres as State aid, the Commission contravened Article 87(1) EC. In its last plea, Forum 187 submits that that decision is vitiated by a lack of adequate reasoning as regards the Commission’s basis for going back on its previous decisions.

i) The plea alleging the lack of any legal basis and infringement of the principle of legal certainty

– Arguments of the parties

201. Forum 187 submits that the principle of legal certainty requires the Commission to comply with its past decisions and that the circumstances in which it may withdraw an unlawful decision are very restricted. The association claims that the Commission’s decision to initiate the formal investigation procedure had two bases, namely Article 1(b)(v) of Regulation No 659/1999 and its general power to correct a previous mistake. In its decision of 17 February 2003, the Commission added Articles 87 EC and 88 EC. Forum 187 argues that that decision lacks any