Case C-334/02: Action brought on 20 September 2002 by the Commission of the European Communities against the French Republic
Date: 2002-10-26
Institutions: Court of Justice
Subjects: France, action for failure to fulfil an obligation, free movement of capital, freedom to provide services, tax on income

C 261/10

EN

Official Journal of the European Communities

26.10.2002

The Commission claims that the Court should:

The applicant claims that the Court should:

— declare that, by failing to adopt all the necessary measures
prescribed by Council Regulation No 3508/92 (1) estab-
lishing an integrated administration and control system
for certain Community aid schemes, the Hellenic Republic
has failed to fulfil its obligations under that regulation;

— order the Hellenic Republic to pay the costs.

— Declare that, by excluding absolutely the application of
the rate of levy in discharge to income arising from the
investments and contracts referred to in Articles 125-0 A
and 125 A of the Code général des impôts (General Tax
Code), where the debtor is not resident or established in
France, the French Republic has failed to fulfil its obli-
gations under Articles 49 and 56 EC;

— Order the French Republic to pay the costs.

Pleas in law and main arguments

Pleas in law and main arguments

Under the regulation at issue, the Member States were obliged
to establish by 1 January 1997 an integrated system including
a computerised data base, an alphanumeric identification
system for agricultural parcels, an alphanumeric system for
the identification and registration of animals, standardised
processing of aid applications and an integrated control system
(Article 2).

The Greek authorities have not yet established an integrated
system of that kind, and the alternative system which they
apply for checking areas and requests for payment has
repeatedly been considered inadequate and has been the cause
of corrections in the clearing of accounts.

( 1) OJ L 355, 5.12.1992, p. 1.

The income referred to in Article 125 A of the Code general
des impôts (CGI) (income from interest arising from arrears
and from all kinds of State bonds, stocks, participation share
certificates, stocks and other certificates of
indebtedness,
deposits, guarantees and current accounts) and that referred to
in Article 125-0 A of the CGI (income from certificates or
bond investments and other similar investments), is subject to
income tax. None the less, the levy in discharge (which is often
attractive because its rate is generally lower than the marginal
rate of tax resulting from the application of the progressive
scale of tax on income and of splitting income) can be applied
to it only if the debtor is resident or established in France.

The Commission takes the view that the above constitutes a
restriction on the freedom to provide services and on the free
movement of capitals contrary to Articles 49 and 56 of the EC
Treaty, in that the more generally favourable levy in discharge
is not applied to income collected by French residents from a
debtor which is not resident or established in France, even if
the person in question is able to provide evidence that it fulfils
all the conditions in which the levy in discharge is applied to
income obtained from a debtor resident or established in
France.

Action brought on 20 September 2002 by the Com-
mission of the European Communities against the French
Republic

(Case C-334/02)

(2002/C 261/16)

Action brought on 20 September 2002 by the Com-
mission of the European Communities against the Grand
Duchy of Luxembourg

(Case C-335/02)

(2002/C 261/17)

An action against the French Republic was brought before the
Court of Justice of the European Communities on 20 Septem-
ber 2002 by the Commission of the European Communities,
represented by R. Lyal and Ch. Giolito, acting as Agents, with
an address for service in Luxembourg.

An action against the Grand Duchy of Luxembourg was
brought before the Court of Justice of the European Communi-