Keywords

Summary



Keywords

1. State aid – Planned aid – Examination by the Commission – Preliminary review and main review – Compatibility of aid with the common market – Difficulties of assessment – Commission's duty to initiate the main review procedure – Definition – Serious difficulties – Objective nature

(Art. 88(2) and (3) EC)

2. Procedure – Application initiating proceedings – Formal requirements

(Statute of the Court of Justice, Art. 21; Rules of Procedure of the General Court, Art. 44(1)(c))

3. Procedure – Introduction of new pleas during the proceedings – Conditions

(Rules of Procedure of the General Court, Art. 48(2), first para.)

4. State aid – Examination by the Commission – Compatibility of aid with the common market – Discretion – Consistent application of Articles 87 EC and 88 EC and other provisions of the Treaty pursuing the objective of undistorted competition in the common market

(Arts 87 EC and 88 EC)

5. State aid – Planned aid – Examination by the Commission – Preliminary review and main review – Compatibility of aid with the common market – Difficulties of assessment – Commission’s duty to initiate the main review procedure – Exemption scheme involving potential tax discrimination as between domestic and imported products – Insufficient and incomplete examination – Indication of the existence of serious difficulties

(Arts 23 EC, 25 EC, 88(2) and (3) EC and 90 EC)

Summary

1. The formal investigation procedure under Article 88(2) EC is essential whenever the Commission has serious difficulties in determining whether aid is compatible with the common market. The Commission may restrict itself to the preliminary examination under Article 88(3) EC when taking a decision in favour of aid only if it is able to satisfy itself after the preliminary examination that the aid is compatible with the common market. If, on the other hand, the initial examination does not enable all the difficulties involved in determining whether the aid is compatible with the common market to be overcome, the Commission is under a duty to obtain all the requisite opinions and for that purpose to initiate the procedure provided for in Article 88(2) EC.

The notion of serious difficulties is an objective one. Whether or not such difficulties exist requires investigation of both the circumstances under which the contested measure was adopted and its content. That investigation must be conducted objectively, comparing the grounds of the decision with the information available to the Commission when it took a decision on the compatibility of the disputed aid with the common market. It follows that judicial review by the Court of the existence of serious difficulties will, by nature, go beyond consideration of whether or not there has been a manifest error of assessment.

If such difficulties exist, a Commission decision can be annulled on that ground alone, because of the failure to initiate the inter partes and detailed examination laid down in the Treaty, even if it has not been established that the Commission’s assessments as to substance were wrong in law or in fact.

(see paras 55-56, 58)

2. Under Article 21 of the Statute of the Court of Justice and Article 44(1)(c) of the Rules of Procedure of the General Court, every application must state the subject-matter of the proceedings and contain a summary of the pleas in law on which it is based. That statement must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the application, if necessary, without any further information. In order to guarantee legal certainty and sound administration of justice it is necessary, in order for an action to be admissible, that the basic legal and factual particulars relied on be indicated, at least in summary form, coherently and intelligibly in the application itself.

(see para. 81)

3. No new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure, as the first subparagraph of Article 48(2) of the Rules of Procedure of the General Court provides. However, a plea in law which may be regarded as amplifying a plea previously put forward, directly or by implication, in the application initiating proceedings, and is closely connected with that plea is admissible.

(see para. 87)

4. Although the procedure provided for in Articles 87 EC and 88 EC leaves a margin of discretion to the Commission for assessing the compatibility of an aid scheme with the requirements of the common market, it is clear from the general scheme of the Treaty that that procedure must never produce a result which is contrary to the specific provisions of the Treaty. That obligation on the part of the Commission to ensure that Articles 87 EC and 88 EC are applied consistently with other provisions of the Treaty is all the more necessary where those other provisions also pursue the objective of undistorted competition in the common market. When adopting a decision on the compatibility of aid with the common market, the Commission must be aware of the risk of individual traders undermining competition in the common market.

Accordingly, State aid, certain conditions of which contravene other provisions of the EC Treaty, cannot be declared by the Commission to be compatible with the common market. In addition, in determining whether aid is compatible with the common market, it must take account of market conditions, including fiscal aspects. It follows that, under the Treaty system, aid cannot be implemented or approved in the form of tax discrimination, by a Member State, in respect of products originating from other Member States.

(see paras 91-92)

5. Where the initial examination of aid in the preliminary investigation phase referred to in Article 88(3) EC does not enable all the difficulties involved in determining whether the aid is compatible with the common market to be overcome, the Commission is under a duty to obtain all the requisite opinions and for that purpose to initiate the procedure provided for in Article 88(2) EC. If the examination carried out by the Commission during the preliminary examination procedure is insufficient or incomplete, this constitutes evidence of the existence of serious difficulties.

Thus, where a relief scheme for an environmental tax itself constitutes State aid, the tax discrimination as between domestic products and products imported from another Member State, contrary to Articles 23 EC and 25 EC or Article 90 EC, to which it is liable to give rise, raises a question relating to the consistent application of Articles 87 EC and 88 EC. The fact that the Commission does not examine that question in its decision not to raise objections at the end of the preliminary investigation procedure is an indication of the existence of serious difficulties, which requires the procedure provided for in Article 88(2) EC to be initiated.

(see paras 55, 57, 90, 94-98, 102)