Case C-84/04: Action brought on 20 February 2004 by the Commission of the European Communities against the Portuguese Republic
Date: 2004-04-17
Institutions: Court of Justice
Subjects: EAGGF, European Commission, European Investment Bank, Portugal, Structural Funds, action for failure to fulfil an obligation, balance of payments assistance

C 94/26

EN

Official Journal of the European Union

17.4.2004

brought before the Court of Justice of the European Commu-
nities on 18 February 2004 by DLD Trading Company, repre-
sented by Dr J. Hintermayr, Dr F. Haunschmidt, Dr G. Minich-
mayr, Dr P. Burgstaller and G.J. Tusek, Marienstr. 4, A-4020
Linz.

Justice of

An action against the Portuguese Republic was brought before
the Court of
the European Communities on 20
February 2004 by the Commission of the European Commu-
nities, represented by A.M. Alves Vieira, acting as Agent, with
an address for service in Luxembourg.

The appellant claims that the Court should:

The applicant claims that the Court should:

1. allow the appeal and

— vary the judgment of the Court of First Instance of 17
December 2003 in Case T-146/01 (1) so as to order the
Council of the European Union to pay compensation of
EUR 726 728,34; or

— vary the judgment of the Court of First Instance of 17
the claim for
December 2003 so as to hold that
compensation is well founded and refer the case back to
the Court of First Instance so that it may determine the
amount of compensation to be paid; or

— annul the judgment of the Court of First Instance of 17
December 2003 and refer the case back to the Court of
First Instance;

2. order the defendant to pay the costs of the appeal.

Pleas in law and main arguments:

In support of its appeal, the appellant alleges infringement of
Community law by the Court of First Instance as regards the
following points:

— Erroneous assessment of the causal link between the retro-
activity of Regulation No 2744/98 and the damage suffered
by the appellant. The damage alleged in the present
proceedings was not suffered from 1 January 1998 but,
rather, arose from the entry into force of Regulation
No 2744/98 on 14 December 1998 with effect from 1
January 1998. The damage was caused not by the allow-
ance fixed by the Republic of Austria at ECU 75 but by the
conduct of the Council of the EU. The event giving rise to
the entry into force of Regulation
the damage was
No 2744/98 on 14 December 1998. There is therefore a
direct causal
link between the adoption of Regulation
No 2744/98 by the Council of the EU on 14 December
1998 and the loss of the appellant's claim for an allowance
against the Republic of Austria.

— Failure to take account of

that

the fact

the limitations
placed on the Community system of reliefs from customs
duties (Regulation No 918/83, as amended) by Regulations
No 3316/94 and No 2744/98 are intended to protect the
economy in regions bordering on Austria (‘border undertak-
ings’). However, despite that intended purpose, the geogra-
phical scope of the reduction in the customs allowance
introduced by the abovementioned regulations is unlimited.
The limitations on the customs allowance under Regula-
tions No 3316/94 and 2744/98 are therefore unnecessary,
excessive and disproportionate and thus unlawful.

(1) Not yet published in the European Court Reports.

— declare that, by permitting IFADAP to introduce, and by
allowing to remain in force, a procedure for granting finan-
cial assistance from Community Structural Funds, which
includes substantive requirements involving the payment of
levies which are neither voluntary nor optional and which
do not constitute remuneration for services rendered but
rather serve to finance missions for which the Portuguese
State is, of necessity, responsible by virtue of,
inter alia,
Community law, the Portuguese Government has failed to
fulfil its obligations under Regulation (EEC) No 4253/88 (1)
and Article 10 EC;

— order the Portuguese Republic to pay the costs.

Pleas in law and main arguments

The Portuguese authorities impose an obligation on persons
benefiting from the European Agricultural Guidance and Guar-
antee Fund (EAGGF), Guidance Section, to pay the expenses
relating to public-service duties for which the Member States
are responsible in the case of ‘indirect’ management of financial
instruments, namely management which entails the Member
State concerned selecting projects, paying eligible expenditure
and declaring it to the Commission.

However, Article 21(5) of Regulation (EEC) No 4253/88, as
amended, clearly imposes on the Member State concerned an
obligation to ensure that the beneficiaries receive the advances
and payments and to refrain from making any deduction or
retention from payment made to beneficiaries. The terms
‘retention’ and ‘deduction’ must be interpreted broadly in the
light of their effect, which is the decisive factor.

The links and the relationship of subordinacy between the draft
private-law contract for a supply of services signed by the bene-
ficiaries and IFADAP (Instituto do Financiamento e Apoio ao
Desenvolvimento da Agricultura e Pescas) and the form
annexed to the ‘contract for the grant of aid’, pursuant to
which the beneficiary authorises sums to be debited from its
account and paid to IFADAP in respect of the service provided
by the latter in the context of the aid contract, leave little room
for doubt that the beneficiary has no freedom of choice, parti-
cularly if account is taken of the fact that the beneficiary
knows that IFADAP is the body which oversees the investment
project and is responsible for checking that it is properly imple-
mented.

(1) Council Regulation (EEC) No 4253/88 of 19 December
1988, laying down provisions for implementing Regulation
(EEC) No 2052/88 as regards coordination of the activities
of the different Structural Funds between themselves and
with the operations of the European Investment Bank and
the other existing financial
instruments (OJ 1988 L 374,
p.1).

Action brought on 20 February 2004 by the Commission
the Portuguese
of

the European Communities against

Republic

(Case C-84/04)

(2004/C 94/56)

Reference for a preliminary ruling by the Raad van State
by order of that Court of 18 February 2004 in the case of
Mediakabel B.V. against Commissariaat voor de Media

(Case C-89/04)

(2004/C 94/57)