Case T-207/04: Action brought on 4 June 2004 by the Italian Republic against the Commission of the European Communities
Date: 2004-08-07
Institutions: Court of First Instance
Subjects: European Commission, Italy, Structural Funds, action for annulment (EU), advance payment, aid system, eligible region, structural expenditure

7.8.2004

EN

Official Journal of the European Union

C 201/23

Action brought on 4 June 2004 by the Italian Republic
against the Commission of the European Communities

(Case T-207/04)

(2004/C 201/46)

(Language of the case: Italian)

An action against the Commission of the European Commu-
nities was brought before the Court of First Instance of the
European Communities on 4 June 2004 by the Italian Republic,
represented by Antonio Cingolo, avvocato dello Stato.

The applicant claims that the Court should:

— annul the Commission's letter No E2/LP D(2004) 712 of 25
March 2004, received on 26 March 2004, by which the
European Commission, Directorate-General
for Regional
Policy, communicated to it the decision that amounts in
respect of payments of certain advance payments (advance
payments in the context of aid schemes for any Objective 1
and 2 programme) must be clearly identified in future
payment declarations, in accordance with the provisions of
the abovementioned letter
from Commissioner Barnier,
together with all underlying and connected measures;

— in the alternative, and so far as may be necessary, annul
Commission Regulation (EC) No 448/2004 of 10 March
2004 amending Regulation (EC) No 1685/2000 laying
down detailed rules for the implementation of Council
Regulation (EC) No 1260/1999 as regards the eligibility of
expenditure of operations co-financed by the Structural
Funds;

— in any event, annul all underlying and connected measures;

— order the Commission of the European Communities to

pay the costs.

Pleas in law and main arguments:

The Italian Republic has challenged before the Court of First
Instance of the European Communities the Commission's letter
No E2/LP D(2004) 712 of 25 March 2004 concerning the
payment of advance payments in the context of aid schemes
(MOP Research, Technological Development and Advanced
Training), and – so far as may be necessary – Commission
Regulation (EC) No 448/2004 of 10 March 2004 (1), both
concerning the eligibility of expenditure of operations co-
financed by the Structural Funds.

In support of its claims in respect of the letter of 25 March
2004, the applicant alleges:

— infringement of essential procedural requirements owing to
a complete failure to state reasons and owing to the adop-
tion of the contested measure without any proper legal
basis and without complying with the defendant's internal
procedural rules;

— infringement of Article 9 of Commission Regulation (EC)
No 438/2001 (2) by failing to comply with the accounting
methods set out therein;

— infringement of Article 32 of the basic regulation (3) and of
Commission Regulation No 448/04, which make the
payment of advance payments conditional simply upon
proof that the ‘final beneficiary’ State has transferred the
sums in question to the end recipients of the funds;

— infringement of Regulation No 448/04 owing to breaches
of the principles of equality and legal certainty, and contra-
dictory reasoning in the contested letter.

In respect of Regulation No 448/04,
infringement:

the applicant alleges

— of the rules governing the eligibility of expenditure laid

down by the basic regulation;

— of

the rules governing financial control

(which do not

impose the obligations alleged by the Commission);

— of the principle of proportionality, in so far as the Commis-
sion requests evidence in addition to what is provided for
and is necessary;

— of the principle of non-retroactivity, given that Regulation
No 448/04 contains provisions with retroactive effect for
44 months prior to its adoption, which is clearly unaccep-
table in the light of the general principles governing legisla-
tive enactment.

(1) Commission Regulation (EC) No 448/2004 of 10 March 2004
amending Regulation (EC) No 1685/2000 laying down detailed
rules
the implementation of Council Regulation (EC) No
1260/1999 as regards the eligibility of expenditure of operations
co-financed by the Structural Funds and withdrawing Regulation
(EC) No 1145/2003 (OJ 2004 L 72, p. 66).

for

(2) Commission Regulation (EC) No 438/2001 of 2 March 2001 laying
down detailed rules for the implementation of Council Regulation
(EC) No 1260/1999 as regards
the management and control
systems for assistance granted under the Structural Funds (OJ 2001
L 63, p. 21).

(3) Council Regulation (EC) No 1260/1999 of 21 June 1999 laying
down general provisions on the Structural Funds (OJ 1999 L 161,
p. 1).