Keywords

Summary



Keywords

1. State aid – Examination by the Commission – Misuse of previously approved aid – New aid – Burden of proof

(Arts 10 EC, 87(1) EC and 88(2) and (3) EC)

2. State aid – Administrative procedure – Obligation of the Commission to put the interested parties on notice to submit their observations – Interested parties not able to avail themselves of the right to a fair hearing

(Art. 88(2) EC)

3. Actions for annulment – Pleas in law – Pleas that may be raised against a Commission decision on State aid – Pleas not raised in the administrative procedure

(Arts 88(2) EC and 230 EC)

4. State aid – Not allowed – Derogations – Aid which may be considered compatible with the common market – Aid for restructuring firms in difficulty

(Arts 87(3)(c) EC and 88(2) and (3) EC; Commission Notice No 1999/C 288/02, points 3.2.2 and 3.2.4)

5. State aid – Not allowed – Derogations – Discretion of the Commission – Judicial review – Limits

(Art. 87(3) EC)

6. Acts of the institutions – Statement of reasons – Obligation – Scope – Correction of an error of reasoning during the proceedings before the Court – Not permissible

(Art. 253 EC)

7. State aid – Definition – Assessment criterion – Private creditor test

(Art. 87(1) EC)

8. Acts of the institutions – Statement of reasons – Obligation – Scope

(Arts 87(1) EC and 253 EC)

9. State aid – Commission decision finding aid incompatible with the common market and ordering its recovery – Possibility for the Commission to leave it to the national authorities to calculate the exact amounts to be repaid

(Art. 88(2) EC)

10. State aid – Definition – Failure to pay value added tax – Included – Condition

(Art. 87(1) EC)

Summary

1. It is, in principle, for the Commission to provide proof, in a decision finding misapplication of previously approved aid and referring to the existence of new non-notified aid, both of the misapplication of the aid and the grant of new aid. It follows from the provisions of Article 88(2) and (3) EC that if that is not established, the existing aid is covered by the earlier decision approving it and the new measures cannot be regarded as State aid within the meaning of Article 87(1) EC. On the other hand, the burden of proof of the compatibility of aid with the common market, by way of derogation from Article 87(1) EC, is borne principally by the Member State concerned, which must show that the conditions for that derogation are satisfied.

However, that apportionment of the burden of proof is subject to compliance with the procedural obligations imposed on the Commission and the Member State in the course of the exercise by that institution of its powers to cause the Member State to provide it with all the necessary information.

In particular, in order to obtain approval of new or modified aid by way of derogation from the Treaty rules, the Member State concerned must, in order to fulfil its duty under Article 10 EC to cooperate with the Commission, provide all the information necessary to enable that institution to verify that the conditions for the derogation from which it seeks to benefit are satisfied. In addition, the Commission is empowered to adopt a decision on the basis of the information available when it is faced with a Member State which fails to comply with its obligation of cooperation and refuses to provide information requested from it either for the purpose of assessing the compatibility of new or modified aid with the common market or of verifying whether aid previously approved has been properly applied. Before taking such a decision, however, the Commission must order the Member State to provide it, within the time-limit it lays down, with all the documentation, information and data necessary to carry out its review. It is only if the Member State, notwithstanding the Commission’s order, fails to provide the information requested that the Commission is empowered to terminate the procedure and make its decision, on the basis of the information available to it, on the questions whether or not aid has been granted and if it has, whether or not that aid is compatible with the common market, or on deciding that aid previously approved had been properly applied.

Those procedural obligations are binding both on the Member State concerned and on the Commission in order to permit the latter to carry out its review on the basis of sufficiently clear and precise information while ensuring respect for the right of the Member State concerned to be heard.

(see paras 34-37)

2. Article 88(2) EC permits interested parties, including the beneficiaries of the measure under consideration, to submit their observations. Interested parties have only the right to be involved in the administrative procedure to the extent appropriate in the light of the circumstances of the case. Respect for the procedural rights of interested parties, as so defined, is an essential procedural requirement violation of which can have the result that the contested decision should be annulled. That is the case, in particular, where the beneficiaries of aid to be recovered have not, in practice, been able to submit their observations in the course of the formal review procedure because they had not been identified by the Commission in the initiating decision or at a later stage and where it cannot be excluded that had it not been for such an irregularity, the outcome of the procedure might have been different.

However, in so far as the procedure in regard to State aid is instituted solely against the Member State concerned, interested parties cannot, in principle, avail themselves of the right to a fair hearing enjoyed by the individuals against whom a procedure has been instituted, who are entitled to engage in a discussion with the Commission, such as that engaged in with the Member State concerned.

(see paras 42-43)

3. In the context of an action for annulment brought under Article 230 EC, the legality of a Community measure must be assessed on the basis of the elements of fact and of law existing at the time when the measure was adopted. In particular, the assessments made by the Commission must be examined solely on the basis of the information available to it at the time when the assessments were made.

Consequently, an applicant may not, in principle, on pain of inadmissibility, rely on factual arguments which are unknown to the Commission and which it has not notified to the latter during the formal investigation procedure. On the other hand, there is nothing to prevent the interested party from raising against the final decision a plea in law not raised at the stage of the administrative procedure.

(see paras 72-73)

4. It follows from the combined effect of the provisions of Article 87(3)(c) and Article 88(2) and (3) EC, implemented by point 3.2.2.(b), (f) and (g) and point 3.2.4 of the Community Guidelines on aid for rescuing and restructuring firms in difficulty, that any significant amendment to a restructuring plan accepted by the Commission in a decision approving restructuring aid requires, in principle, that the Member State concerned submit a revised plan in all relevant detail so as to permit the Commission to assess its compatibility with the common market, having regard to the conditions set out in point 3.2.4 of the Guidelines.

On the level of procedure, if one of the conditions to which approval of an aid was subject is not satisfied, the Commission may normally adopt a decision derogating from that condition without re-opening the procedure under Article 88(2) EC only in the event of relatively minor deviations from the initial condition. In particular, when the adaptation of a restructuring plan raises doubts as to the compatibility of the aid, the Commission must carry out a formal reconsideration of the compatibility of the aid with the common market.

Those procedural rules confirm that, in the absence of complete implementation of a restructuring plan accepted in the decision approving restructuring aid, the Commission may authorise a significant amendment of the plan, if such is necessary, only on the basis of a formal, thorough consideration of the conformity of the revised plan submitted by the Member State concerned, with the abovementioned conditions laid down in the Guidelines. Consequently, where the Member State concerned does not submit a revised restructuring plan, the Commission, when it assesses the compatibility of the aid, is neither required to, nor is it in a position to, take account of any significant modifications which may have been made to the initial plan on the basis of mere declarations of intent on the part of the Member State concerned.

(see paras 91-93)

5. The Commission enjoys a wide discretion in the application of Article 87(3) EC. Since the Community Court may not substitute its assessment of economically complex facts and circumstances for that of the Commission, the Court’s review must therefore be limited to verifying compliance with procedural rules and the obligation to state reasons, as well as the material accuracy of the facts, and ensuring that there has been no manifest error of assessment or misuse of powers.

(see para. 150)

6. The reasons for a decision must appear in the actual body of the decision and that, save in exceptional circumstances, explanations given ex post facto by the Commission cannot be taken into account. It follows that the decision must be self-sufficient and that the reasons on which it is based may not be stated in written or oral explanations given subsequently when the decision in question is already the subject of proceedings brought before the Community judicature.

(see para. 254)

7. The mere fact that payment facilities are accorded in a discretionary manner by a public creditor is not sufficient to characterise such facilities as State aid. The payment facilities accorded must also be clearly greater than those which would have been accorded by a private creditor in a comparable situation in regard to his debtor, having regard, in particular, to the size of the debt, the legal remedies available to the public creditor, the chances that the debtor’s situation will recover if he is allowed to continue to operate and to the risks to the creditor of seeing his losses increase in the latter case.

State aid, as defined in the Treaty, is a legal concept which must be interpreted on the basis of objective factors. For that reason, the Community judicature must in principle, having regard both to the specific features of the case before it and to the technical or complex nature of the Commission’s assessments, carry out a comprehensive review as to whether a measure falls within the scope of Article 87(1) EC.

However, when the assessment by the Commission of the question whether an investment satisfies the private investor criterion involves a complex economic appraisal, in regard to which it enjoys a wide discretion, judicial review is limited to verifying whether the Commission complied with the relevant rules governing procedure and the statement of reasons, whether the facts on which the contested finding was based have been accurately stated and whether there has been any manifest error of assessment or a misuse of powers. In particular, the Court is not entitled to substitute its own economic assessment for that of the Commission.

(see paras 283-285)

8. With regard to a Commission decision on State aid, the statement of reasons cannot be limited to a finding that the measure constitutes State aid but must refer to the specific facts in such a way as to enable the parties concerned to express their views on the accuracy and relevance of the alleged facts and circumstances and to permit the Court to exercise its power of review.

It is not however necessary for the statement of reasons to specify all the relevant matters of fact or of law, since the question whether the statement of reasons for a measure satisfies the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.

(see paras 286-287)

9. No provision of Community law requires the Commission, when ordering the recovery of aid declared incompatible with the common market, to fix the exact amount of the aid to be recovered. It is sufficient for the Commission’s decision to include information enabling the recipient to work out that amount himself, without overmuch difficulty. The Commission is therefore able legitimately to confine itself to declaring that there is an obligation to repay the aid in question and leave it to the national authorities to calculate the exact amounts to be repaid.

The advantage to the debtor of tolerance, on the part of a public creditor, of non-payment or delayed payment of his debt is constituted precisely by the exemption from, or delay in, payment of the debt from the time at which it fell due. That advantage does not necessarily coincide with the amount which a private creditor could have recovered if he had ceased to tolerate the default or delay in payment.

Thus, in order to establish whether a debtor has enjoyed an advantage, the Commission merely has to verify whether, at the latest, at the time that its decision was adopted, a private creditor in the same situation would clearly not have continued to tolerate the default or delays in payment. That consideration does not require it to determine the precise moment at which a private creditor would have ceased to tolerate the default or delay in payment and would have taken steps to obtain payment of the debt.

(see paras 291, 293-294)

10. In principle, value added tax is neutral in regard to competitive position. Value added tax paid by a taxable person could be deducted as input tax immediately or refunded within a short period. The only advantage of which a taxable person could benefit by virtue of not paying value added tax would be, perhaps, a cash-flow advantage arising from the temporary disbursement of the input tax.

In that context, the failure to pay value added tax is not, in principle, sufficient to raise a presumption that an undertaking has enjoyed an advantage within the meaning of Article 87(1) EC. It is the Commission’s duty to verify whether, in the circumstances of the case, that non-payment confers a cash-flow advantage on the person concerned.

(see paras 361, 363)