Case T-369/05: Action brought on  23 September 2005  — Kingdom of Spain v Commission of the European Communities
Date: 2005-11-26
Institutions: Court of First Instance
Subjects: EAGGF Guarantee Section, EU financing arrangements, European Commission, Spain, action for annulment (EU)

26.11.2005

EN

Official Journal of the European Union

C 296/35

— alternatively, annul Decision C(2005)2685 of 15 July 2005
excluding from Community financing certain expenditure
incurred by the Member States under the Guarantee Section
of the European Agricultural Guidance and Guarantee Fund
(EAGGF)
in so far as it concerns the calculation and
amount of the financial correction, and order the Commis-
sion to bear the costs of the proceedings;

— in the alternative, annul Decision C(2005)2685 of 15 July
2005 excluding from Community financing certain expen-
diture incurred by the Member States under the Guarantee
Section of the European Agricultural Guidance and Guar-
antee Fund (EAGGF) in so far as it concerns the expenditure
of the accredited paying agency Agricultural Market Austria
in the animal premia sector for the regions of Steiermark
and Kärnten; or, in the further alternative, annul the Deci-
sion in relation to Steiermark and Kärnten in so far as it
concerns the calculation and the amount of the financial
correction, and order the Commission to bear the costs of
the proceedings.

Action brought on 23 September 2005 — Kingdom of
Spain v Commission of the European Communities

(Case T-369/05)

(2005/C 296/72)

Language of the case: Spanish

Parties

Applicant(s): Kingdom of Spain (represented by: D. Fernando
Diez Moreno)

Defendant(s): Commission of the European Communities

Pleas in law and main arguments

In the contested decision the Commission excluded from Com-
munity financing the expenditure itemised in the annex to the
Decision because it does not comply with Community rules.

Form of order sought

The applicant basis its action on two pleas. First of all, it claims
that,
in adopting its decision, the Commission infringed the
Treaty and the norms applicable when implementing it. In par-
ticular, it alleges in this respect, infringement of Article 5(2)(c)
of Regulation (EEC) No 729/70 (1) and Article 7(4) of Regu-
lation (EC) No 1258/1999 (2) since a financial correction at the
expense of the Republic of Austria would only have been
admissible if the Republic of Austria had not complied with its
obligations arising from Community law as regards controlling
EAGGF expenditure and if this had had financial consequences
for the EAGGF. According to the Republic of Austria, such
cumulative conditions should not be applied in the present
case. Moreover, with the contested decision, the Commission is
in breach of its duty to cooperate in good faith with the
Member States, as laid down in Article 10 EC.

The second plea alleges infringement of essential procedural
requirements. The applicant claims that, with the contested
decision, the Commission did not comply on important points
with its duty to give reasons and it based the underlying argu-
ments for its decision on statements based on insufficient fact
finding.

(1) Regulation (EEC) No 729/70 of the Council of 21 April 1970 on

the financing of the common agricultural policy.

(2) Council Regulation (EC) No 1258/1999 of 17 May 1999 on the

financing of the common agricultural policy.

The applicant(s) claim(s) that the Court should:

— annul Commission Decision of 15 July 2005 (2005/555/
2685) in so far as it refers to the financial corrections made
in respect of Spain in relation to the conversion and
restructuring of vineyards and the measures
the
improvement of the production and marketing of honey;
and

for

— order the Commission to pay the costs.

Pleas in law and main arguments

This action is brought against the Commission Decision of 15
July 2005 (2005/555/EC) excluding from Community financing
certain expenditure incurred by the Member States under the
Guarantee Section of
the EAGGF. Among the exclusions
contained in that decision are financial corrections which affect
the Kingdom of Spain and apply to the fruit and vegetable
the milk sector, public storage, wine and tobacco,
sector,
animal premiums and the honey sector.

This action refers exclusively to the correction of the amounts
paid by way of compensation for loss of income in the wine
sector (EUR 4 790 799,61) and the correction made for the
inclusion of VAT in the EAGGF financing in the honey sector
(EUR 58 315,34). The applicant
the
Commission bases its arguments on a restrictive interpretation
of Regulation (EC) No 1493/1999 of 17 May 1999 on the
common organisation of the market in wine (1). The Kingdom
of Spain also challenges the VAT rules on the improvement of
the production and marketing of honey.

the view that

takes

C 296/36

EN

Official Journal of the European Union

26.11.2005

The Spanish authorities take the view that:

— the loss of income is connected not to grubbing up, but to

the very act of planting; and

— the Commission's argument that VAT cannot be regarded
as an intervention intended to stabilise the markets, since it
cannot be financed by the Guarantee Section of
the
EAGGF, has no legal basis.

the new entrants have not used up the allowances specifi-
cally reserved for them, is incompatible with criterion (10)
of Annex III to Directive 2003/87/EC; and (iii) that part of
the Decision which calls upon the Italian state to amend
the NAP so that existing installations which are subject to
an update of their permits are not allowed to draw allow-
ances from the new entrants reserve for the part of the
modified installation which already existed before the
permit update (Article 2(b) of the Decision).

(1) OJ L 179 of 14.7.1999, p. 1.

— order the Commission to pay the costs of the proceedings.

Action brought on 28 September 2005 — AIETC — Asso-
ciazione Italiana Tecnico Economica del Cemento and
Others v Commission

(Case T-371/05)

(2005/C 296/73)

Language of the case: Italian

Parties

Applicant(s): AITEC — Associazione Italiana Tecnico Economica
(Casale
del Cemento (Rome,
Monferrato,
Italy)
(represented by: Massimo Merla, Claudio Tesauro, lawyers)

Italy), BUZZI UNICEM S.P.A.
ITALCEMENTI GROUP (Bergamo,

Italy),

Defendant(s): Commission of the European Communities

Form of order sought

The applicants claim that the Court should:

— insofar as the Commission is unable to demonstrate that
the mandate given to Commissioner Dimas authorised him
to be a signatory to measures adopted concerning competi-
tion policy and, in particular, state aid, make a declaration
that the Decision is null and of no effect;

— annul: (i) that part of the Decision in which, by stating that
no objections are made to the national allocation plan
(‘NAP’) (Article 2 of the Decision) and thereby approving
the distribution of allowances among the sectors of industry
set out in the plan, it sanctioned the discrimination inherent
in that distribution which favoured undertakings in some
sectors to the disadvantage of other undertakings; (ii) that
part of the Decision which states that the intended authori-
to an
sation of existing installations which are subject
update of their permits to draw allowances from the new
entrants reserve for the part of the modified installation
which already existed before the permit update, even where

Pleas in law and main arguments

The subject of this action is the Decision of 25 May 2005 (1) in
which the Commission gave its opinion on the compatibility of
the national allocation plan for greenhouse gas emission allow-
ances notified to it by Italy (‘NAP’) with the criteria listed in
Annex III to Directive 2003/87 of the European Parliament and
of the Council of 5 June 2002 (2).

First, the applicants seek to ascertain whether the Commis-
sioner who was signatory to the contested measure is compe-
tent to adopt the Decision. In particular, they call upon the
Instance to establish whether Commissioner
Court of First
Dimas has competence in relation to measures adopted
concerning competition policy and, in particular, state aid, and
to make a declaration, should there be sufficient grounds, that
the contested measure is null and of no effect.

Secondly, the applicants contend that by examining the NAP, a
measure that is liable to incorporate elements of state aid,
without complying with the procedural provisions in Article
88 (2) and (3) EC, the Commission infringed that provision.

the applicants submit

Thirdly,
that when the Commission
became aware that there were potential state aid aspects to the
NAP, it infringed Article 87 EC, criterion (5) of Annex III to
Directive 2003/87 EC and the principle of non-discrimination
in that, by approving the distribution of allowances set out in
the NAP, it gave its approval to the discrimination inherent in
that distribution, which was to the detriment of cement produ-
cers.

The applicants submit fourthly that the Commission misapplied
criterion (10) of Annex III to Directive 2003/87 EC in stating
that ‘Italy's intended authorisation of existing installations which are
subject to an update of their permits to draw allowances from the new
entrants reserve for the part of the modified installation which already
existed before the permit update’ was contrary to that criterion.
The Commission thereby infringed criterion (5) of Annex III to
Directive 2003/87 EC and the principle of non-discrimination
in that, by failing to take account of the specific nature of the
sectors of industry affected by the implementation of the Direc-
tive as far as their capacity to increase production was
concerned, it again placed cement producers at a disadvantage
compared with other producers.