Case T-424/05: Action brought on  16 November 2005  — Italian Republic v Commission
Date: 2006-01-28
Institutions: Court of First Instance
Subjects: European Commission, Italy, action for annulment (EU), company with share capital, investment, market capitalisation, securities, tax on investment income

28.1.2006

EN

Official Journal of the European Union

C 22/23

— award the applicant damages of EUR 150 000.

Pleas in law and main arguments

The action is brought against the Commission's decision of 29
July 2004 to reassign the applicant to headquarters.

In support of his claims, the applicant argues that the decision:

— is unlawful, unjustified and arbitrary for failing to take
account of the fact that, at the time of the assignment, the
medical committee had recognised that the applicant was
unfit for service until 31 December 2004;

— does not allow the official
prescribed by his doctor;

to continue the therapy

— cannot be justified by the interests of the service, since an
official on sick leave cannot fulfill the work requirements of
the service.

The applicant adds that the contested decision has caused him
to lose the rights of an official in a non-member country, since
his illness arose at a time when he was performing the func-
tions of resident adviser in Guatemala.

Action brought on 16 November 2005 — Italian Republic
v Commission

(Case T-424/05)

(2006/C 22/41)

Language of the case: Italian

Parties

Applicant(s):
Avv. dello Stato)

Italian Republic (represented by: Paolo Gentili,

Defendant(s): Commission of the European Communities

Form of order sought

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

— annul the contested decision;

— order the Commission to pay the costs.

Pleas in law and main arguments

The present action, brought by the Italian Republic,
is
concerned with Commission decision No C(2005) 3302 of 6
September 2005.

By that decision, the Commission declared to be incompatible
with the common market
the provisions of Article 12 of
Decree Law No 269/2003, converted into Law No 326/2003.

It provides, essentially, that the rate of tax replacing income tax
levied on the net profits of the various types of investment
funds and open-ended investment companies is to be reduced
from 12.5 % to 5 % where the funds or companies invest
during the calendar year at least two-thirds of the value of their
assets, for more than one-sixth of the fund's business days, in
small or medium-sized quoted capitalisation funds. Such funds
or companies are referred to as being 'specialised'.

the measure is

According to the Commission,
selective,
favouring, first, small or medium-sized capitalisation undertak-
ings as compared with others, channelling certain funds
towards them; second, they favour the specialised funds or
companies, as compared with general funds or companies, by
allowing them to assign greater income to individual units,
since the income is subject to a lower replacement tax. More-
over, it is a measure which has no connection with the general
tax system and in fact constitutes nothing more than opera-
tional aid. Finally, there is no reason for any derogation in
favour of the measure under Article 87(3)(c) EC.

According to the Italian Government, the decision is vitiated,
first, from the procedural point of view, because the decision to
initiate the procedure under Article 88(2) EC was adopted
without a prior exchange of views between the Commission
and the Italian administration, as provided for in Regulation No
659/99 concerning procedures for State aid (first plea).

Next, no adequate reasons are given concerning the basic
profile put forward by the Italian Government in the course of
the procedure: in the Italian legislation (which transposes the
directives on regulation of financial markets), unit trusts and
open-ended investment companies are classified merely as inde-
pendent funds divided into units. They do not therefore consti-
tute undertakings within the meaning of Community law. The
Commission took note of that situation, but observed that 'in
certain cases' such investment instruments constitute undertak-
ings; however, the Commission did not specify in what cases
and under what conditions open-ended investment companies
and funds acquire that status (second plea).

The third plea alleges infringement of Article 87 EC, on the
basis that open-ended investment funds and companies cannot,
by virtue of their nature, ever be regarded as undertakings
within the meaning of Community law, in so far as they are
merely forms of collective ownership of transferable securities.
However, even if they are regarded as such, the alleged aid is
not selective, because any interested party (companies mana-
ging 'contractual' unit trusts or promoting open-ended invest-
ment companies) could establish specialised instruments along-
side general instruments, and thus take advantage of the relief
available.

C 22/24

EN

Official Journal of the European Union

28.1.2006

The fourth plea criticises the decision for taking the view that
the beneficiaries of the alleged aid are quoted small or medium-
sized capitalisation companies when in fact the real benefici-
aries of the relief are merely the subscribers to the funds or
open-ended investment companies, which means, potentially,
anybody: accordingly, the relief does not target undertakings
and is not selective. The Commission has not demonstrated
that direct relief for subscribers gave rise to indirect relief for
the said companies.

that

its economic impact

The fifth plea again alleges infringement of Article 87 EC and
an inadequate statement of reasons for the Commission's deci-
the measure has an impact on intra-Community
sion that
competition, despite the fact
is
minimal
(according to the Commission itself, amounting in
2004 to Euro 1 100 000.00). Nor has the Commission clarified
the classification as operational aid, since the replacement tax is
not a management cost for intermediaries who manage collec-
tive investment instruments. It is clear from the purpose of
strengthening small and medium-sized capitalisation companies
that, as far as the latter are concerned, the measure is of a
structural nature.

— annul the implied decision refusing assistance under Article

24 of the Staff Regulations;

— order the European Parliament to pay collective compensa-
tion for the damage suffered by the applicants as a result;

— order the defendant to pay the costs

Pleas in law and main arguments

The applicants are in a situation analogous to that of the appli-
cants in Case T-359/05 and invoke, in support of their applica-
tion, the same pleas and arguments invoked by the applicants
in that case.

The sixth plea criticises the part of the decision that rejects
recourse to a derogation under Article 87(3)(c) EC. The aim of
widening the asset base of companies with limited capitalisa-
tion, which find it more difficult than widely quoted companies
to gain access to the venture-capital market,
is in fact an
economic policy objective which displays links with the above-
mentioned provision allowing derogations.

Order of the Court of First Instance of 24 November
2005 — Rica Foods v Commission

(Case T-87/01) (1)

(2006/C 22/43)

Language of the case: Dutch

The President of the Fifth Chamber has ordered that the case be
removed from the register.

Action brought on 29 November 2005 — Vienne and
Others v Parliament

(1) OJ C 186, 30.6.2001.

(Case T-427/05)

(2006/C 22/42)

Language of the case: French

Order of the Court of First Instance of 24 November 2005
— Rica Foods v Commission

Parties

Applicants: Philippe Vienne (Bascharage, Luxembourg) and
Others (represented by: G. Bounéou, F. Frabetti, lawyers)

(Case T -211/01) (1)

(2006/C 22/44)

Language of the case: Dutch

Defendant: European Parliament

The President of the Fifth Chamber has ordered that the case be
removed from the register.

Form of order sought

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

(1) OJ C 317, 10.11.2001.