CELEX: 62003CC0046
Language: en
Date: 2005-06-09 00:00:00
Title: Opinion of Advocate General Stix-Hackl delivered on 9 June 2005. # United Kingdom of Great Britain and Northern Ireland v Commission of the European Communities. # Structural funds - Decommitment of amounts - Conditions - Manchester/Salford/Trafford 2 ('MST 2') Programme. # Case C-46//03.

OPINION OF ADVOCATE GENERAL
      STIX-HACKL
      delivered on 9 June 2005 1(1)
      
      Case C‑46/03
      United Kingdom of Great Britain and Northern Ireland
      v
      Commission of the European Communities
      Intervener: Council of the European Union
      (European Regional Development Fund – Manchester/Salford/Trafford 2 programme (‘MST 2’) – Budget commitment – Time‑limit under Article 52(5) of Council Regulation (EC) No 1260/1999 – Commission’s decision to decommit)
      Table of contents
      
      I –  Introduction
      II –  Law
      III –  Facts
      IV –  Procedure
      V –  Assessment
      A – Admissibility of the action under Articles 230 EC and 231 EC
      B – Substance
      1. First plea: errors of law, of interpretation and of assessment in the decision of 22 November 2002
      a) Arguments of the United Kingdom
      b) Arguments of the Commission
      c) Legal assessment
      i) The mutual relationship of the regulations
      ii) The argument that an application within the meaning of Article 52(5) of Regulation No 1260/1999 was submitted in compliance
         with the time‑limit
      
      The final report
      The declaration of expenditure
      Interim finding
      iii) The alleged non‑use of discretion
      iv) The alleged infringement of the principle of proportionality
      v) The alleged infringement of the principle of legal certainty
      vi) The alleged infringement of the principles of good administration, Community solidarity and regional partnership, and
         of the principle of cooperation between Community institutions and Member States
      
      2. Second plea: the conduct of the Commission
      a) Main submissions
      b) Legal analysis
      i) The effectiveness of the arguments
      ii) The Commission’s duty to inform under the fourth subparagraph of Article 31(2) of Regulation No 1260/1999
      iii) Specific aspects of the Commission’s conduct
      3. Third plea: lack of reasoning for Commission Decision C (92) 1358/8
      a) Arguments of the United Kingdom
      b) Arguments of the Commission
      c) Legal analysis
      VI –  Conclusion
      I –  Introduction
      1.        By the present action, the United Kingdom seeks from the Court, firstly, a declaration under Article 230 EC and Article 231
         EC that the Commission’s decision of 22 November 2002 to decommit the balance of EUR 11 632 600 committed for the Manchester/Salford/Trafford
         2 operational programme (‘MST 2’) within the European Regional Development Fund (ERDF) is void. The United Kingdom claims
         in essence that that decision is based on a misinterpretation of Article 52(5) of Regulation (EC) No 1260/1999 (2) and/or of Article 10 of the Annex to Decision C (92) 1358/8. 
      
      2.        Secondly, in the event that the Commission’s interpretation of Article 52(5) of Regulation No 1260/1999 and/or of Article
         10 of the Annex to Decision C (92) 1358/8 is correct, the United Kingdom seeks a declaration under Article 241 EC that the
         said measures are inapplicable to the United Kingdom. However, by letter of 23 March 2005, the United Kingdom withdrew this
         claim. 
      
      II –  Law
      3.        Article 21 of 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 (3) is headed ‘Payments’. Paragraph 4 of Article 21 states:
      
      ‘Payment of the balance in respect of each commitment shall be conditional on:
      –      submission to the Commission by the designated authority referred to in paragraph 1 of a request for payment within six months
         of the end of the year concerned or of completion in practice of the operation concerned,
      
      –      submission to the Commission of the relevant reports referred to in Article 25(4),
      –      transmission by the Member State to the Commission of a certificate confirming the information contained in the request for
         payment and the reports.’
      
      4.        Regulation No 4253/88 was repealed by Regulation No 1260/1999 laying down general provisions on the Structural Funds, which
         entered into force on 1 January 2000. (4)
      
      5.        Article 52 of Regulation No 1260/1999 is headed ‘Transitional provisions’. Paragraph 5 of Article 52 provides:
      ‘Partial sums committed for operations or programmes approved by the Commission before 1 January 1994, but in respect of which
         no application for final payment has been received by 31 March 2001, shall be automatically decommitted no later than 30 September
         2001, giving rise to the repayment of amounts unduly paid, without prejudice to operations or programmes which have been suspended
         on account of legal proceedings.’
      
      III –  Facts
      6.        On 6 July 1992, the Commission, in response to an application from the United Kingdom of 20 September 1991, adopted Decision
         C (92) 1358/8 on Community assistance from the European Regional Development Fund (‘ERDF’) and the European Social Fund (‘ESF’)
         for an integrated operational programme concerning Manchester, Salford, Trafford under the Objective 2 Community support framework
         for Community structural assistance for the area of North West England in the United Kingdom adopted on 18 December 1991 (‘the
         MST 2 programme’). 
      
      7.        In that decision, the Commission adopted the MST 2 programme covering the period from 1 January 1992 to 31 December 1993 and
         fixed the amount of the contribution from the ERDF, in accordance with the financing plan, at ECU 56.51 million. In addition,
         it fixed the end date for the completion of the payments by the United Kingdom to the final beneficiaries entrusted with the
         implementation of the operations at the national level at 31 December 1995, although the United Kingdom could be granted an
         extension of that time-limit by the Commission upon submission of a substantiated request in due time. 
      
      8.        Article 6 of that decision expressly pointed out that, for assistance from the Structural Funds to be provided, the specific
         conditions contained in Article 10 of the Annex to the decision, which forms an integral part of the decision, were to be
         complied with. Non‑compliance with those conditions might entail suspension of the assistance.
      
      9.        Article 10 of the Annex to Decision C (92) 1358/8 reads: 
      –      ‘Payment of the balance in respect of each commitment shall be conditional on the following cumulative conditions:
      –      submission to the Commission by the designated authority of the request for payment within six months following the end of
         the year concerned or of completion in practice of the operation concerned; this demand shall be put forward on expenditure
         actually incurred by the final beneficiaries and for which supporting documents exist;
      
      –      submission to the Commission of the relevant reports referred to in Article 25(4) of Regulation (EEC) No 4253/88, in a standard
         form to be agreed;
      
      –      transmission by the Member State to the Commission of a certificate confirming the information contained in the request for
         payment and the reports.’
      
      10.      By Decision C (93) 3804 of 17 December 1993, the Commission increased the ERDF contribution to ECU 58.163 million and modified
         its Decision C (92) 1358/8 in that respect accordingly.
      
      11.      On 22 December 1993, an official of the Government Office for the North West (the competent regional authority, ‘the GONW’)
         wrote to the members of the Monitoring Committee and to the Commission, enclosing financial tables revised in accordance with
         the new Commission decision. That letter wrongly assumed a total amount of ERDF assistance of ECU 58.76 million. 
      
      12.      In reply, by fax of 14 February 1994, the Commission sent the GONW a copy of the table in which the total amount had been
         revised in manuscript to ECU 58.163 million and requested that authority’s confirmation. The latter wrote to the Commission
         by fax of 21 February 1994 that the figures in the financial tables which the Commission had sent by fax on 14 February 1994
         were correct.
      
      13.      By Decision C (96) 461 of 4 March 1996, the Commission extended the time‑limit for the completion of payments by the United
         Kingdom to the final beneficiaries from 31 December 1995 to 31 December 1996 and again modified Decision C (92) 1358/8 accordingly.
      
      14.      On 11 June 1999, the GONW submitted a draft final report on the MST 2 programme to the Commission. On 31 July 2000, the GONW
         sent a copy of a new, updated draft final report to the Commission.
      
      15.      By letter of 26 February 2001, the GONW informed the Commission that it was currently preparing the final financial tables
         for the MST 2 programme. These would be e‑mailed to the Commission as soon as they were completed, but in any event before
         the time-limit of 31 March 2001, after which the funds committed would automatically be decommitted.
      
      16.      By letter of 15 March 2001, the GONW then sent the final report on the MST 2 programme to the Commission, stating that proof
         of the expenditure actually incurred would be e‑mailed as soon as possible, once the outstanding issues had been cleared with
         Manchester City Council, and also before the time-limit for automatic decommitment.
      
      17.      By e‑mail of 21 March 2001, the GONW sent four financial tables to the Commission, noting that they would enable the Commission
         to close the MST 2 programme. At the same time, the official responsible asked to be called if there were any queries, since
         he was aware of the tight deadlines to be met.
      
      The financial tables in question, which were in Excel format, were the following:
      Approved projects by applicant (Appendix 3)
      Approved projects by priority (Appendix 4)
      Indicative financial allocations by measure (Appendix 5, Tables 1A, 1B, 1C, 3A and 3B, Tables 1C and 3A being identical in
         content)
      
      Breakdown of eligible expenditure by calendar year (Appendix 5, Tables 2A and 2B)
      Financial out‑turns by measure (also Appendix 3)
      Annual instalments committed (Appendix 5, Table 4).
      18.      The tables at Appendix 3 (Approved projects by applicant) and Appendix 4 put the eligible expenditure for all projects at
         a total of GBP 111 735 335. Table 2A of Appendix 5, on the other hand, shows a total of GBP 107 746 599, on a breakdown of
         the figures by priority, and the information on priorities 3 and 5 in planning year 1996 is missing from that table.
      
      19.      Appendix 5, Tables 1A and 1B, put the ERDF contribution at ECU 56.51 million, whereas Tables 1C and 3A put it at ECU 58.76
         million. 
      
      20.      According to Appendix 3, the total is likewise ECU 58.76 million. In that regard, Appendix 3 expressly refers to the Commission’s
         decision of December 1993.
      
      21.      Because of the conflicting information in the tables on the total amount of financing from the ERDF, there was subsequently
         uncertainty on both sides as to the level of ERDF financial support which had been promised in the final analysis. It is,
         however, clear that the GONW still continued to assume that the financing plan annexed to Decision C (93) 3804 was the binding
         one.
      
      22.      By e‑mail of 8 May 2001, the Commission asked for revised annexes to the MST 2 programme. That was followed by an exchange
         of e‑mails between the parties concerned in July and August 2001, in which the GONW submitted revised figures to the Commission
         on a number of occasions, namely on 14 June, 19 July, 6 August and 13 August 2001. In the meantime, the Commission did not
         invoke the expiry of the period terminating on 31 March 2001. Instead, on 5 September 2001, again by e‑mail, it requested
         the submission of two further documents, one of which was ‘a copy of the final declaration of expenditure for MST 2’ which
         the Commission directorate concerned estimated had been submitted as long ago as 1997. 
      
      23.      The Commission reiterated its request in an e‑mail of 24 October 2001, whereupon the e‑mail correspondence between the Commission
         and the GONW continued on 20 December 2001 and 15 January 2002.
      
      24.      By e‑mail of 18 January 2002, the Commission finally informed the GONW that the first priority was to establish whether a
         signed final declaration of expenditure had been received by 31 March 2001. A copy of the final financing plan, which had
         not yet been received, would be obtained. According to the Commission’s records, the final financing plan was the one annexed
         to Decision C (93) 3804. The GONW replied by e‑mail of 25 January 2002 that up to that date no final declaration on the MST
         2 programme had been submitted and gave as the reason for this that information as to which Commission decision was to be
         used as the basis for the declaration was still awaited.
      
      25.      Despite this, the Director‑General of DG Regional Policy, by letter of 24 January 2002 addressed to the Permanent Representative
         of the United Kingdom to the EU, requested confirmation that neither a final certificate of expenditure nor an application
         for final payment had been submitted by 31 March 2001 and set a time‑limit for a reply of 7 February 2002.
      
      26.      On 4 February 2002, the GONW, in reference to the letter of 24 January 2002, informed the Commission by e-mail that confirmation
         of the figures in the financial tables submitted on 13 August 2001 was awaited. Following that, the final certificate of expenditure
         and the application for final payment would be submitted.
      
      27.      After the Commission had pointed out that that was not an answer to the question of 24 January 2002, the GONW replied on 4
         February 2002 and in a message of 6 February 2002 that there was difficulty with these old programmes in locating the original
         documents and that they had therefore usually worked closely with the Commission. Until the Commission declared that it was
         satisfied with the figures, the authority was unable to submit the final certificate of expenditure.
      
      28.      The Commission pointed out in an e‑mail of 6 February 2002 that no figures could be given by the Commission without knowing
         the amount of expenditure incurred. Accordingly, submission of the original signed forms as soon as possible was requested.
      
      29.      On the same day, the GONW signed the Commission’s form certifying the expenditure incurred and requesting payment from the
         Commission and submitted it to the Commission. That form showed that the expenditure amounted in total to GBP 111 735 335.
         The table of expenditure annexed to the form contained, for the years 1992 to 1995, the same figures according to priority
         as Appendix 5 Table 2A attached to the e‑mail of 21 March 2001. The expenditure declared for 1996 was, however, now different
         for each priority, that is, not merely supplemented by the information relating to priorities 3 and 5. (5)
      
      30.      By letter of 18 April 2002 addressed to the United Kingdom Permanent Representative to the EU, the Director‑General of DG
         Regional Policy advised inter alia that the document of 6 February 2002 could not be accepted as an application for payment
         because Article 52(5) of Regulation No 1260/1999 prescribed a time‑limit of 31 March 2001 for the submission of such a document.
         In accordance with that provision, the balance was to be automatically decommitted. In addition, the Commission set a period
         for a reply of two months from receipt of the letter and suspended the payment procedure until then. If no reply was received
         by the expiry of that period, the Commission would close the programme as indicated above and proceed accordingly.
      
      31.      By letter of 12 June 2002, the United Kingdom Permanent Representative replied that the relevant information had been submitted
         by 31 March 2001 and that it had been assumed that the financial tables forwarded on 21 March 2001 would suffice as a declaration
         of expenditure pending resolution of the disagreement with the Commission as to which financing plan was now the final one.
         The GONW had always insisted that Decision C (93) 3804 was the definitive decision but the Commission had confirmed this only
         on 18 January 2002. The delay in submitting the application had therefore been unavoidable. Moreover, nothing would have been
         gained by submitting an application on the basis of figures which had not been agreed by the Commission for the approval of
         the balance.
      
      32.      By letter of 22 November 2002, which is also the subject‑matter of these proceedings (‘the contested decision’), the Commission
         disputes the purported inevitability of the delay in submitting the application. The final application and the declaration
         of expenditure were dependent on the national commitments made, and such commitments could not subsequently be altered. The
         argument put forward concerning the financing plan could not be accepted. In so far as the GONW insisted that Decision C (93) 3804
         was the definitive one, it contradicted its own position adopted in Appendix 5, Table 3A, of the final report. Consequently,
         none of the arguments put forward could prevent the legal consequence of Article 52(5) of Regulation No 1260/1999 from ensuing
         in the case of non‑submission of an application by the time-limit. The appropriate unit in the Directorate‑General was instructed
         to decommit the balance of EUR 11 632 600. In addition, the Commission was obliged to order the recovery of EUR 9 272 767.82.
      
      33.      By letter of 6 December 2002 to the Commission, the GONW pointed out inter alia that, if that was that case, under Article
         52(5) of Regulation No 1260/1999 the Commission should have decommitted by 30 September 2001. The Commission had itself acted
         inconsistently in this respect. 
      
      IV –  Procedure
      34.      The application was registered at the Court of Justice on 31 January 2003. By order of the President of the Court of 25 March
         2003, the Council was granted leave to intervene in support of the Commission. 
      
      35.      The United Kingdom claims that the Court should:
      1.      pursuant to Articles 230 EC and 231 EC, order the annulment of the following measures:
      (a)      a Commission decision contained in a letter of 22 November 2002 to decommit the sum of EUR 11 632 600;
      (b)      a subsequent decision taken on a date unknown to the United Kingdom in December 2002 or January 2003 to decommit that sum;
      (c)      any steps taken pursuant to those decisions, including the act of decommitment itself;
      (d)      a Commission decision contained in a letter of 22 November 2002 to issue a recovery order for the sum of EUR 9 272 767 already
         paid to the United Kingdom in respect of the MST 2 programme; and
      
      (e)      any steps taken pursuant to that decision;
      2.      pursuant to Article 231 EC, declare that each of the said measures is void;
      3.      pursuant to Article 241 EC, declare that, in the event that the Commission’s interpretation of Article 52(5) of Regulation
         No 1260/1999 and/or of Article 10 of the Annex to Commission Decision C (92) 1358/8 is correct, the said measures are inapplicable
         against the United Kingdom;
      
      4.      order the Commission to pay the costs of the proceedings.
      36.      Following the Commission’s statement on 13 March 2003 that it had decided not to recover the amount of EUR 9 272 767.82, the
         United Kingdom withdrew its action in that respect (claims 1(d) and (e)). By letter of 23 March 2005, incorrectly dated 23
         March 2004, the United Kingdom withdrew claim No 3.
      
      37.      The Commission contends that the Court should:
      –        dismiss the application as inadmissible in part and unfounded for the rest;
      –        in the alternative, dismiss the application as unfounded in its entirety;
      –        order the applicant to pay the costs.
      38.      The Council contends that the Court should:
      –        declare that the United Kingdom’s claim under Article 241 EC is inadmissible or, in the alternative, unfounded;
      –        order the applicant to pay the costs of the proceedings.
      39.      As, by letter of 23 March 2005, the United Kingdom withdrew its claim under Article 241 EC, the question whether or not the
         claim concerned was inadmissible may in any event remain undecided. Accordingly, the corresponding submissions of the Council
         and the Commission will not be examined further. Their contentions in that regard must be regarded as devoid of purpose. 
      
      V –  Assessment
      A –    Admissibility of the action under Articles 230 EC and 231 EC
      40.      The Commission contests the admissibility of the United Kingdom’s claims seeking a declaration that all decisions and measures,
         including the decommitment itself, which were taken following the letter of 22 November 2002 are void. It bases this view
         on the argument that those decisions and measures are merely inevitable consequences of the letter of 22 November 2002. 
      
      41.      With regard to the admissibility of the forms of order sought by the action, the subject of the action must therefore first
         be clarified. Under Article 230 EC, any act of the Commission, other than recommendations or opinions, may be the subject
         of an action for a declaration that it is void. It follows from this that an act may be the subject of an action only if it
         is intended to produce legal effects, that is, if it is intended in terms of its content to lay down binding rules applicable
         to specific situations. (6)
      
      42.      The question in the present case is whether, over and above the notification to the Member State that the conditions for refraining
         from automatic decommitment under Article 52(5) of Regulation No 1260/1999 are not met, the decommitment itself, in the form
         of an internal instruction, is admissible as the subject of an action.
      
      43.      It should be borne in mind in this connection that decommitment is the ‘reverse’ of a budget commitment. A budget commitment
         is a decision to finance a particular programme or project. Such a decision serves to implement the budget, and a distinction
         must be made between (internal (7)) budget commitments and (external) decisions on applications for payment. As the result of a decommitment, the funds in question
         may no longer be paid out without a new budget commitment. Against that background, it must be held that a Commission decision
         stating that the conditions for automatic decommitment are met is an external act, whereas the decommitment itself is an internal
         process and, as such, not actionable.
      
      44.      The Commission first pointed out by letter of 18 April 2002 that the balance of the approved ERDF assistance had to be decommitted.
         In giving the United Kingdom two months within which to reply, during which time the procedure would be suspended, the Commission
         was nevertheless also making it clear that it was not yet intended thereby to make any binding determination.
      
      45.      By letter of 22 November 2002, the Commission then confirmed the basis for decommitment as indicated on 18 April 2002 and
         advised that the appropriate internal unit had in the meantime been instructed to decommit the balance. 
      
      46.      That decision thus produces external legal effects, since the United Kingdom is being informed in a binding manner that the
         balance of EUR 11 632 600 will no longer be paid. 
      
      47.      That decision by the Commission is therefore the subject of the action. All subsequent decisions and measures confirming that
         decision are thus merely the de facto consequence, and no separate normative substance can be attributed to them. (8)
      
      48.      Claims 1(b) and (c) are therefore inadmissible.
      49.      The remainder of the action is admissible.
      B –    Substance
      50.      The United Kingdom bases its action for annulment of the decision of 22 November 2002 on three pleas in law. By the first
         plea, it alleges errors of law, of interpretation and of assessment on the part of the Commission in its contested decision.
         By the second plea, the United Kingdom objects to the conduct of the Commission. By its inactivity, the latter created the
         legitimate expectation on the part of the applicant that the application for final payment had been submitted in the correct
         form and manner. By the third plea, it alleges lack of reasoning for the contested decision. 
      
      1.      First plea: errors of law, of interpretation and of assessment in the decision of 22 November 2002
      a)      Arguments of the United Kingdom
      51.      By the first plea, the United Kingdom expresses its view that the Commission’s finding that the United Kingdom infringed the
         requirements of Article 52(5) of Regulation No 1260/1999 is unlawful on the grounds of errors of law, of interpretation and
         of assessment.
      
      52.      It bases its view on the contention that Article 52(5) of Regulation No 1260/1999 does not require that the application be
         submitted in any specific form. In particular, Article 52(5) does not require Member States to confirm the information. The
         requirements of Article 10 of the Annex to Decision C (92) 1358/8 have no application in this case because the provisions
         of Regulation No 1260/1999 alone are applicable, so that use of the ERDF standard form is not required either.
      
      53.      Article 54 of Regulation No 1260/1999 repealed Regulation No 4253/88 with effect from 1 January 2000, with the result that
         the latter was no longer in force on the material date in this case. Article 10 of the Annex to Decision C (92) 1358/8 was
         therefore repealed at the same time. Regulation No 1260/1999 created an entirely new legal regime.
      
      54.      At the hearing, the United Kingdom Government drew attention to an apparent contradiction between the Commission’s legal view
         and that of the Council. While the Commission bases its view inter alia on Article 21(4) of Regulation No 4253/88, the Council
         proposes that Article 52(5) of Regulation No 1260/1999 should be read in conjunction with Article 32(4) of the latter.  The
         intention of the United Kingdom to submit an application for payment of the balance, even without using the standard form,
         is clear from the correspondence between the GONW and the Commission. In the final analysis, all the information which would
         have been required on the standard form was submitted.
      
      55.      By 31 March 2001 the Commission had received an appropriate application. This was contained in the documents which were submitted
         on 26 February, 15 March and 21 March 2001, which also contained all the information which the Commission needed for a final
         decision on the MST 2 programme. The final report was submitted on 15 March 2001 and no longer needed the approval of the
         State since the regional authority is empowered to provide binding information itself. The declaration of expenditure was
         submitted by e‑mail before the time‑limit, on 21 March 2001.
      
      56.      The incorrect information stating total expenditure as GBP 107 766 705 instead of GBP 111 735 335 was of no consequence since
         the correct total was apparent from Appendix 4. Even taking that incorrect figure as a basis, the United Kingdom would still
         be entitled to the balance inasmuch as the latter could have been granted even on the basis of the first-mentioned figure.
      
      57.      Moreover, the Commission’s interpretation infringes the principle of legal certainty since, according to its wording, Article
         52(5) of Regulation No 1260/1999 does not impose any requirements as to the form of the required application. The drastic
         penalty for which Article 52(5) provides should apply only where there has been an undoubted failure to comply with a clear
         and unequivocal provision. 
      
      58.      Finally, in view of the drastic nature of the penalty, the principle of proportionality established in Article 5 EC was also
         infringed. The ability of the Fund to function was at no time placed in jeopardy.
      
      59.      In any event, the requirements of Article 10 of the Annex are not mandatory. The Commission has a wide discretion in this
         respect, which Article 6 of Decision C (92) 1358/8 also demonstrates. According to that provision, non‑compliance with the
         conditions governing submission of the application does not automatically entail a specific penalty. 
      
      60.      Equally, Article 10 of the Annex provides that the form of the reports to be submitted is to be agreed. It follows that these
         are flexible procedural rules. The Commission therefore erred in law in stating in its letter of 22 November 2002 that it
         had no discretion in relation to the alleged non‑compliance with the requirements of Article 10 of the Annex to Decision C (92) 1358/8.
      
      61.      The Commission also infringed the principles of good administration, Community solidarity and regional partnership and the
         principle of cooperation between Community institutions and Member States under Article 10 EC. 
      
      b)      Arguments of the Commission
      62.      The Commission, by contrast, is of the view that the spirit and purpose of Article 52(5) is that the Commission ought to have
         had at its disposal by 31 March 2001 all the documents needed to allow it to close a programme. By that date, therefore, the
         Commission should have had all the necessary documents in a useable form. An uncertified declaration of expenditure, which
         was sent by e‑mail as an Excel file, cannot, under any circumstances, be regarded as an admissible application for payment,
         not only because the standard form was not used, but also because such a document must be signed and certified in accordance
         with Article 21(4) of Regulation No 4253/88.
      
      63.      Were the Commission to accept such documents as binding, it would infringe Article 274 EC, under which it is obliged to ensure
         responsible management of the Community’s finances.
      
      64.      Even though Regulation No 4253/88 was repealed by Article 54 of Regulation No 1260/1999, that is subject to the provisions
         of Article 52(1) of Regulation No 1260/1999. Under Article 52(1), the legislation which applied on 31 December 1999 continues
         to apply to programmes from the programme planning periods 1989 to 1993 and 1994 to 1999. Article 21(4) of Regulation No 4253/88
         therefore remains applicable to the MST 2 programme.
      
      65.      Nor does the Commission’s interpretation infringe the principle of legal certainty. Article 10 of the Annex to Commission
         Decision C (92) 1358/8 sets out clearly the conditions for payment of the balance. Article 52(5) of Regulation No 1260/1999
         lays down the time‑limit by which an application for payment for programmes approved before 1 January 1994 must be submitted.
         Moreover, the provision also specifies the legal consequence of automatic decommitment.
      
      66.      There is also no infringement of the principle of proportionality. Submission of an application within the specified time
         is a fundamental obligation for the proper functioning of the Structural Funds. Failure to comply with it conflicts with the
         Commission’s duty under Article 274 EC. Nor does Article 52(5) of Regulation No 1260/1999 give the Commission any discretion
         because it provides for a mandatory legal consequence. 
      
      67.      It is true that under Article 6 of Decision C (92) 1358/8 the Commission had discretion to amend the provisions of the decision.
         However, it did not thereby also have discretion to vary a superior rule of law. 
      
      68.      The allegation that the Commission’s interpretation infringed the principles of good administration, Community solidarity
         and regional partnership and the principle of cooperation between Community institutions and Member States under Article 5
         EC does not meet the requirements of Article 21 of the Statute of the Court of Justice and Article 38(1)(c) of the Rules of
         Procedure of the Court of Justice since the United Kingdom does no more than list a number of principles without stating specifically
         how they may have been infringed.
      
      c)      Legal assessment
      69.      The legal point to be cleared up first and foremost is whether and to what extent Article 52(5) of Regulation No 1260/1999
         is to be interpreted to the effect that it superseded the provisions of Article 21(4) of Regulation No 4253/88 and Decision
         C (92) 1358/8, which was adopted on the basis of that regulation, including the Annex to that decision, for the purposes of
         the MST 2 programme as regards the contested form and the content of an application for payment of the balance of Community
         financial assistance.
      
      70.      Should it be necessary to reject such an interpretation, it will have to be considered to what extent the documents submitted
         by the United Kingdom were capable of preventing the legal consequence of automatic decommitment specified in Article 52(5)
         of Regulation No 1260/1999 from arising, regardless of possible compliance with the procedural and substantive requirements
         of the provisions of Article 21(4) of Regulation No 4253/88 or the corresponding Article 10 of the Annex to Decision C (92) 1358/8,
         which according to such a hypothesis were all still applicable.
      
      i)      The mutual relationship of the regulations
      71.      Under Article 54 of Regulation No 1260/1999, upon its entry into force that regulation repealed Regulations No 2052/88 and
         No 4253/88. However, that applies expressly without prejudice to Article 52(1) of Regulation No 1260/1999.
      
      72.      Article 52 contains, as its heading states, ‘transitional provisions’ and provides in paragraph 1 that, in particular, the
         continuation of assistance approved on the basis of the regulations being repealed is to remain unaffected by Regulation No
         1260/1999. Article 52(2) allows, for example, the possibility of new assistance being approved on the basis of the repealed
         regulations if the applications were submitted on that basis.
      
      73.      By means of those transitional provisions the Community legislature determined that assistance which had already been approved
         was to be continued in accordance with its original legal basis and that in specific circumstances new assistance could be
         considered and approved under old legislation. With regard to the MST 2 programme at issue in this case, Regulation No 2052/88
         and the implementing Regulation No 4253/88, together with Decision C (92) 1358/8, modified by Decisions C (93) 3804 and C (96) 461,
         constitute the relevant legal basis. 
      
      74.      The United Kingdom’s view that those provisions were superseded by Regulation No 1260/1999 is therefore incorrect. Nevertheless,
         the question regarding the relationship between Regulation No 1260/1999 and the original legal basis of the MST 2 programme
         remains undecided. Continuation of the assistance already approved in accordance with its original legal basis does not, in
         principle, preclude automatic decommitment under Article 52(5) of Regulation No 1260/1999, which undoubtedly also applies
         to the MST 2 programme. It is therefore uncertain to which particular requirements the legal consequence laid down by that
         provision is to be attached. 
      
      75.      The mechanism of automatic decommitment under Article 52(5) of Regulation No 1260/1999 is an innovation by that regulation
         vis‑à‑vis Regulation No 4253/88. The latter provided only for reduction, suspension or cancellation of assistance once the
         Commission had examined it and found that there was an irregularity or a significant change affecting the nature or conditions
         of the operation or measure, which the Commission had not approved. (9) In any event, it is noteworthy that those legal consequences penalised the conduct of the final recipient of the Community
         financial assistance, (10) whereas the decommitment at issue here concerns (only) the conduct of the Member State. 
      
      76.      The aim of the legislature in introducing this new mechanism of automatic decommitment is to ensure sound management of Community
         resources by making improvements to the forecasting and implementing of expenditure. (11)
      
      77.      On the one hand, Article 52(5) of Regulation No 1260/1999 extends the period for the submission of an application for final
         payment to 31 March 2001, that is, beyond the period of six months after the end of the year concerned or after completion
         of the operation, laid down in Article 21(4) of Regulation No 4253/88. On the other hand, it introduces for the first time
         the legal consequence of automatic decommitment in the event of failure to comply with the time-limit.
      
      78.      It is now necessary to establish whether the legal consequence introduced by Article 52(5) of Regulation No 1260/1999 in connection
         with the time‑limit for the submission of an ‘application for final payment’ may be attached as a penalty to non‑compliance
         with the requirements of Article 21(4) of Regulation No 4253/88 or Article 10 of the Annex to Decision C (92) 1358/8, (12) which is identical in that respect. 
      
      79.      An argument against such an assumption undoubtedly lies in the lack of any express reference to the requirements of Article
         21(4) of Regulation No 4253/88 in Article 52(5) of Regulation No 1260/1999. In that connection, the United Kingdom refers
         to the judgment of 26 May 1982 in Germany  v Commission, (13) according to which ‘the principle of legal certainty, however, requires that a provision laying down a preclusive period,
         particularly one which may have the effect of depriving a Member State of the payment of financial aid its application for
         which has been approved and on the basis of which it has already incurred considerable expenditure, should be clearly and
         precisely drafted so that the Member States may be made fully aware of the importance of their complying with the time-limit’.
         That case‑law appears to be relevant in so far as the period laid down in Article 52(5) of Regulation No 1260/1999 is conceived
         as a preclusive period as regards the legal consequence of automatic decommitment and failure to comply with it is associated
         for the Member State concerned with forfeiture of funds.
      
      80.      In reality, automatic decommitment under Article 52(5) represents a significant increase in penalty as compared with the previous
         position in law, (14) so that, in the light of the case‑law cited, an interpretation of Article 21(4) of Regulation No 4253/88 to the effect that
         it was modified by way of Article 52(5) of Regulation No 1260/1999 by the addition of a new legal consequence attached to
         a preclusive period must probably be ruled out.
      
      81.      However, it cannot follow from this that no requirements of any kind should be imposed with respect to the information to
         be provided by the Member State for the purpose of submitting the application for final payment under Article 52(5) of Regulation
         No 1260/1999. That follows already from the abovementioned objective of that transitional provision. (15) Even though the Commission was not entitled, under Article 52(5) of Regulation No 1260/999, to demand compliance with the
         individual requirements of Article 21(4) of Regulation No 4253/88 or Article 10 of the Annex to Decision C (92) 1358/8, it
         nevertheless cannot be deprived of all authority to impose requirements as to the correctness and reliability of the information
         provided by the United Kingdom before the time‑limit of 31 March 2001. (16) Such authority must be attributed a fortiori to the Commission when it is considered, for example, that, in the final analysis,
         the purpose clearly pursued by the mechanism of automatic decommitment implements in secondary legislation the principle of
         sound financial management established in primary law, namely Article 274 EC.
      
      Any interpretation of the concept of ‘application for final payment’ in Article 52(5) of Regulation No 1260/1999 which takes
         no account of other provisions of Regulation No 1260/1999 and Regulation No 4253/88 is also precluded by the fact that the
         essential normative content of Article 21(4) of Regulation No 4253/88 was adopted by Article 32(4) of Regulation No 1260/1999.
         Notwithstanding the question of the temporal scope of both provisions, it is clear from that adoption that Regulation No 1260/1999
         left the form, content and function of the application for final payment unaffected, with the result that, contrary to the
         view put forward by the representative of the United Kingdom at the hearing, Article 52(5) of Regulation No 1260/1999 cannot
         in any event be interpreted without due regard to other provisions, whether of Regulation No 4253/88 or Regulation No 1260/1999.
      
      In this connection, it can be left open as to whether the Council’s submission that Article 52(5) should be interpreted in
         conjunction with Article 32(4) of Regulation No 1260/1999 is or is not compatible with the Commission’s legal view.
      
      82.      It thus follows that Article 52(5) of Regulation No 1260/1999 is to be interpreted to the effect that non‑compliance with
         the requirements of Article 21(4) of Regulation No 4253/88 does not, by itself, trigger automatic decommitment, but that,
         as regards information on expenditure incurred which is submitted in no specific form, the Commission does indeed have a right
         to determine whether such information can be accepted as an application for final payment for the purpose of Article 52(5)
         of Regulation No 1260/1999. 
      
      83.      The Commission therefore based its decision on a legally erroneous interpretation of Article 52(5) of Regulation No 1260/1999
         in so far as it attached the penalty of automatic decommitment provided for in that article to non‑compliance with the conditions
         specified in Article 21(4) of Regulation No 4253/88 and/or Article 10 of the Annex to Commission Decision C (92) 1358/8.
      
      84.      As regards the present case, contrary to the legal view taken by the Commission, the fact that the United Kingdom did not
         use the form issued by the Commission, which is normally used for submitting applications for payments from the Fund and for
         making the declaration certifying the information on the expenditure, therefore appears to be irrelevant.
      
      85.      That legally erroneous interpretation of Article 52(5) of Regulation No 1260/1999 could, however, be immaterial if the Commission
         was entitled to assume, in the circumstances of the present case, that the United Kingdom had failed to submit an application
         under Article 52(5) of Regulation No 1260/1999 in compliance with the time‑limit.
      
      ii)    The argument that an application within the meaning of Article 52(5) of Regulation No 1260/1999 was submitted in compliance
         with the time‑limit
      
      
       The final report
      86.      The GONW e‑mailed the final report on the MST 2 programme as an Excel document to the Commission on 15 March 2001. However,
         that information was not confirmed by the United Kingdom by 31 March 2001. 
      
      87.      The United Kingdom’s view that it was itself not required to confirm the information at all, on the ground that the designated
         authority was empowered at national level to provide the Commission with information independently, cannot be accepted.
      
      88.      Both the third indent of Article 21(4) of Regulation No 4253/88 and the corresponding provision of the third indent of Article
         10 of the Annex to Decision C (92) 1358/8 expressly require a certificate from the Member State confirming the information.
         In contrast, the requirements of the first and second indents are to be complied with by the designated national authority. (17)
      
      89.      That distinction also accords with the spirit and purpose of the provision. During the programme planning phase it is the
         Member State and the Commission which act, whereas after the completion of that phase, that is, from the time of adoption
         of a Community support framework, the Member State is to entrust an authority with the implementation of the programmes. (18) The advantage given as the reason for this is that local authorities are much more easily able to manage the programmes.
         The Member State nevertheless remains responsible for supervising the implementation of programmes. (19)
      
      90.      Even though, according to the legal view taken here, non‑compliance with the requirements of the third indent of Article 21(4)
         of Regulation No 4253/88 or of the third indent of Article 10 of the Annex to Decision C (92) 1358/8 is not, by itself, capable
         of triggering the legal consequence laid down in Article 52(5) of Regulation No 1260/1999, the fact none the less remains
         that submission of an unconfirmed final report by a local authority does not afford a sufficient guarantee as to reliability.
         In particular, such a report does not show that the Member State assumes responsibility for the factual and arithmetical accuracy
         of the information provided. Viewed thus, the Member State in question has failed to provide a legally binding confirmatory
         declaration, which, notwithstanding the abovementioned requirements which do not apply directly, certainly appears to be mandatory
         in this context. (20)
      
      91.      The alleged empowerment of the authority by the Member State does not justify a different conclusion. A national legal provision
         is not capable of modifying, let alone repealing, unilaterally any obligation under Community law.
      
       The declaration of expenditure
      92.      The GONW also submitted before the time‑limit, on 21 March 2001, a declaration of expenditure in tabular form. However, according
         to the documents before the Court, the information on the expenditure incurred contained inconsistencies and errors. 
      
      93.      At one point the total expenditure is shown as GBP 111 735 335 and at another as GBP 107 746 599. It is true that the sum
         of GBP 111 735 335, which is presumably correct, was contained in Appendix 4 to the GONW’s e‑mail of 21 March 2001. However,
         that sum contradicted the information in Appendix 5, Table 2A, resulting in corresponding uncertainty.
      
      94.      Even if, as the applicant has objected, both sums justified payment, the uncertainty as to the binding nature of the conflicting
         figures remains. The declaration that the expenditure at least remains within a certain range is not adequate for the purpose
         of verifying the information by reference, where appropriate, to the supporting documents to be submitted. 
      
      95.      Moreover, under Article 274 EC, the Commission is required to ensure sound financial management. This requires it to verify
         the information as precisely as possible when deciding on the payment of financial assistance from the Funds, in order to
         prevent abuse. However, it is unable to do so while it has before it only uncertain figures for expenditure, which in the
         final analysis cannot even be attributed precisely to a particular operation.
      
      96.      In the final analysis, it is indisputable that the information in question was corrected only after the time-limit had passed,
         namely on 14 June, 19 July, 6 and 13 August 2001, and therefore in any event belatedly. The spirit and purpose of the mandatory
         time‑limit in Article 52(5) of Regulation No 1260/1999 require all information relevant to the Commission’s decision to be
         submitted before that time‑limit passes. The possibility of subsequent correction, as favoured by the United Kingdom, appears
         incompatible with the purpose pursued by that provision. 
      
       Interim finding
      97.      It must be concluded from the foregoing that the Commission did not make any manifestly erroneous use of its right to verify
         the information in the application for payment provided for in Article 52(5) of Regulation No 1260/1999.
      
      98.      Even though it must be conceded to the United Kingdom that the submission of partly incorrect figures and declarations is
         not, by itself, capable of triggering the legal consequence provided for in Article 52(5) of Regulation No 1260/1999, particularly
         since it is sufficient, for the purpose of speedy and efficient completion of the assistance operation by means of the payment
         of any balances, to take no further account of differing (correct) amounts after the passing of the time-limit if that would be at the expense of the Community budget, it must nevertheless be stated here
         that, in this case, the submission of such incorrect information was accompanied by a failure to certify the final report.
         With such an accumulation of sources of risk, the Commission could not simply let the matter rest.
      
      99.      Against that background, the Commission was entitled to come to the conclusion that a Member State fails to submit an application
         for final payment in compliance with the time-limit as prescribed by Article 52(5) of Regulation No 1260/1999 where the information
         provided by it does not satisfy the – implied but mandatory – requirements concerning the reliability of the information in
         the application for payment and remains unconfirmed by the expiry of the relevant period. The legal basis of the contested
         decision thus appears, at least in this regard, to be sound. (21)
      
      iii) The alleged non‑use of discretion
      100. Article 52(5) of Regulation No 1260/1999 is a mandatory provision and allows the Commission no discretion. It provides for
         mandatory decommitment if no appropriate application for final payment has been submitted by 31 March 2001. The Commission
         decision implementing that legal consequence is therefore not unlawful on the ground of an error in regard to the use of discretion. (22)
      
      101. The United Kingdom is, admittedly, not wrong in pointing out that Article 6 of Decision C (92) 1358/8, which provides that
         non‑compliance with the conditions governing an application for payment may entail suspension of the assistance, allows the
         Commission a discretion in that respect. 
      
      102. As I have already stated, (23) the mechanism of automatic decommitment is an innovation introduced by Article 52(5) of Regulation No 1260/1999. In view
         of the drastic nature of that legal consequence, the provision in question must be interpreted independently. It is therefore
         irrelevant here whether or not, under Regulation No 4253/88 or Decision C (92) 1358/8, which is based on it, any margins of
         discretion were allowed in another context. 
      
      103. It must therefore be concluded that the application of automatic decommitment under Article 52(5) of Regulation No 1260/1999
         was not at the Commission’s discretion in so far as the Commission had found, after examining the documents and information
         submitted, that no application for final payment had been received.
      
      iv)    The alleged infringement of the principle of proportionality
      104. The Commission decision did not infringe the principle of proportionality under Article 5 EC, which, according to the Court’s
         case‑law, requires the measures imposed by the Community institutions to be appropriate to achieve the intended objective
         and not to exceed the limits of what is necessary to that end. (24)
      
      105. Strict compliance with the time‑limit in Article 52(5) is necessary to maintain the proper functioning and sound management
         of the Structural Funds in accordance with Article 274 EC. Because the activities of the Structural Funds are implemented
         on a decentralised basis by the Member States, it is only when applications for payment are submitted at the relevant time
         that it is at all possible for the Commission to make sense of the expenditure incurred, which ultimately justifies payments
         within the limits of the funds committed. 
      
      106. The proper functioning of the Funds also makes it necessary to ensure that delayed additions or corrections of a substantive
         nature affecting applications for payment for the purposes of Article 52(5) of Regulation No 1260/1999 can no longer prevent
         decommitment, since otherwise management of the resources would be hampered by applications which could only be understood
         with difficulty.
      
      v)      The alleged infringement of the principle of legal certainty
      107. The United Kingdom’s allegation that the Commission’s interpretation of Article 52(5) infringes the principle of legal certainty
         is unfounded.
      
      108. Article 52(5) of Regulation No 1260/1999 unequivocally stipulates 31 March 2001 as the end of the period for the submission
         of an application for final payment and states unambiguously that automatic decommitment is the consequence in law of non‑compliance
         with that time‑limit.
      
      109. According to the documents before the Court, the United Kingdom – including at the level of the GONW – was aware what information
         had to be provided in such an application for final payment. The GONW itself stated clearly on a number of occasions that
         it was aware of the time-limit. Furthermore, it clearly attempted to draw up a final report together with declarations in
         compliance with the time‑limit. In that connection, reference should be made to the letters of 26 February, 15 and 21 March
         2001, in which the GONW expressly mentions the end date of 31 March 2001 or states that it is aware that very tight deadlines
         have to be met. 
      
      vi)    The alleged infringement of the principles of good administration, Community solidarity and regional partnership, and of the
         principle of cooperation between Community institutions and Member States
      
      110. The United Kingdom’s submission that the Commission’s interpretation and application of the rules infringe the principles
         of good administration, Community solidarity and regional partnership and the principle of cooperation between Community institutions
         and Member States under Article 10 EC must be rejected as unsubstantiated. The United Kingdom fails to demonstrate the alleged
         breaches. Article 21 of the Statute of the Court of Justice and Article 38(1)(c) of the Rules of Procedure of the Court of
         Justice do, however, require at least a summary of the pleas in law on which an application is based. For that purpose it
         is necessary that the alleged breaches should also be set out in a clear and comprehensible manner. 
      
      111. Consequently, the first plea must be rejected as unfounded.
      2.      Second plea: the conduct of the Commission
      a)      Main submissions
      112. By its second plea, the United Kingdom argues in essence that the Commission is precluded from objecting to the form and manner
         in which the application for payment was made because it did not inform the United Kingdom before the expiry of the prescribed
         period that the application did not meet the requirements of Article 52(5) of Regulation No 1260/1999. 
      
      113. Moreover, the Commission had a duty to inform the United Kingdom that the form of the application did not, in its opinion,
         satisfy the requirements in force.
      
      114. The Commission’s failure to respond to the documents submitted on 15 and 21 March 2001 until the summer of 2001 gave rise
         to a legitimate expectation on the part of the applicant that all the conditions to be complied with by the application for
         payment of the balance had been met. 
      
      115. The Commission contends in reply, in factual terms, that its services did not at any time create the impression that the documents
         submitted by the time‑limit were sufficient in order to close the programme. It further states that its own conduct in relation
         to the automatic decommitment is in any case irrelevant.
      
      b)      Legal analysis
      i)      The effectiveness of the arguments
      116. This plea must be rejected as ineffective. Even if the arguments are correct, the plea is incapable of leading to the annulment
         of the contested decision.
      
      117. As the Court held in its judgment in Case C-46/98 P, (25) in an action for annulment, the effective nature of a plea which has been raised refers to its capacity, in the event that
         it is well founded, to lead to the annulment sought by an applicant.
      
      118. Even if such a duty to inform existed and the Commission failed to discharge it, it does not necessarily follow that the United
         Kingdom submitted an application for final payment in compliance with the time‑limit.
      
      ii)    The Commission’s duty to inform under the fourth subparagraph of Article 31(2) of Regulation No 1260/1999
      119. For the sake of completeness, consideration must be given to the Commission’s duty to inform, which is expressly introduced
         by the fourth subparagraph of Article 31(2) of Regulation No 1260/1999, according to which the Commission must in any case
         inform the Member State and the paying authority in good time whenever there is a risk of application of the automatic decommitment
         provided for in the second subparagraph.
      
      120. That provision does not apply to the programme in question here. Under the transitional provisions of Article 52 of Regulation
         No 1260/1999, assistance which was approved on the basis of Regulation No 2052/88 and Regulation No 4253/88 implementing it
         is not affected by Regulation No 1260/1999. The Commission’s duty under the fourth subparagraph of Article 31(2) of Regulation
         No 1260/1999 to draw attention to the risk of imminent decommitment applies only to future programmes. 
      
      121. However, the United Kingdom is not thereby placed at a disadvantage by the transitional provisions of Article 52 of Regulation
         No 1260/1999 because, as a result of Article 52(5), the period for the submission of applications for final payment is considerably
         extended as compared with the original period under Article 21(4) of Regulation No 4253/88.
      
      iii) Specific aspects of the Commission’s conduct
      122. For the sake of completeness, I shall also examine below the allegations concerning the Commission’s conduct. 
      123. Even though the Commission’s conduct is not a model of clarity since, in particular after the time‑limit had passed, it was
         still making enquiries with regard to the conflicting information provided by the Member State and/or the GONW and was obviously
         itself no longer clear about the final financing plan, that does not alter the fact that the United Kingdom was in principle
         responsible for ensuring that, on the relevant date, the Commission had all the necessary reliable information on the expenditure
         to enable it to give a final decision concerning it.
      
      124. Nor did the Commission at any time minimise or fraudulently conceal the consequence of automatic decommitment. On the contrary,
         as early as 31 July 2000 it gave notice that it intended to close the MST 2 programme. It thereby, for the first time, called
         indirectly on the United Kingdom to act. 
      
      125. Finally, no duty of any kind for the Commission to confirm individually the expiry of the period arises from the legal bases.
         Nor does any different conclusion follow from Article 10 EC, under which the Community institutions also have a duty to cooperate
         sincerely with the Member States. (26) Where the Commission omits to draw attention to the passing of a time-limit, that does not constitute disloyal conduct if
         the Member State was obviously in no doubt as to the obligation to comply with the time‑limit. (27)
      
      126. Furthermore, with regard to the creation of a legitimate expectation, it should be noted that the contested decision of the
         Commission is based on a Council regulation, with the result that the Commission’s conduct cannot in any event be regarded
         as waiving self‑imposed procedural requirements.
      
      3.      Third plea: lack of reasoning for Commission Decision C (92) 1358/8
      a)      Arguments of the United Kingdom
      127. By the third plea, the United Kingdom alleges that the Commission infringed the obligation to state reasons as laid down in
         Article 253 EC, since the decision of 22 November 2002 does not disclose the principal issues of fact and law on which it
         is based and which are necessary in order for the reasoning to be comprehensible.
      
      128. In particular, there is no explanation whatsoever as to why the information communicated in February and March 2001 was not
         sufficient to constitute an application within the meaning of Article 52(5) of Regulation No 1260/1999. In addition, the Commission
         did not explain why closure of the programme was prevented by the alleged non‑compliance with the requirements to be met before
         the passing of the time‑limit. The Commission’s statement that ‘my services do not agree with the argument put forward concerning
         the final financial plan’ is wholly deficient and unintelligible.
      
      b)      Arguments of the Commission
      129. The Commission, by contrast, contends that the decision is properly reasoned since it complies with the requirements of Article
         253 EC. The letter of 22 November 2002 must be read in the context of the correspondence exchanged with the United Kingdom,
         in particular the letters of 24 January, 18 April and 12 June 2002. The Commission’s view that no application for payment
         of the balance had been submitted by 31 March 2001 is expressed throughout that correspondence. 
      
      130. Moreover, in a letter of 12 June 2002, the United Kingdom finally acknowledged that no formal claim had been submitted by
         31 March 2001. It was therefore aware of the reasons for the decision, even though there was no agreement regarding them.
         
      
      c)      Legal analysis
      131. The Court has consistently held that the statement of reasons for an act must, pursuant to Article 253 EC, disclose in a clear
         and unequivocal fashion the reasoning followed by the Community authority which adopted it in such a way as to make the persons
         concerned aware of the reasons for the measure and thus enable them to defend their rights and the Court to exercise its supervisory
         jurisdiction. The extent of the obligation to state reasons depends on the nature of the act concerned and the circumstances
         in which it was adopted and on all the legal rules governing the matter in question. (28)
      
      132. In particular, the statement of reasons for a decision cancelling Community assistance must, in view of the serious consequences
         for the person benefiting from the assistance, set out clearly the grounds which justify the decision. (29)
      
      133. It is true that the present case does not concern the cancellation of Community assistance. Nevertheless, it does concern
         subsequent refusal of support initially promised, namely payment of the balance of the funds committed within the ERDF for
         the MST 2 programme.
      
      134. In the contested letter of 22 November 2002, the Commission stated essentially that it was obliged to take the decision to
         decommit because an application for payment, as required by Article 52(5) of Regulation No 1260/1999, had not been submitted
         by 31 March 2001.
      
      135. The circumstances in which the decision was adopted confirm that that statement of reasons is sufficient. The duty to state
         reasons always requires less detailed explanations when the addressee of the decision is already clear as to the legal bases
         of the decision and their conditions. (30) As I have already stated, (31) the United Kingdom at least made it clear, before the expiry of the period, that it was aware of the tight deadlines under
         Article 52(5) of Regulation No 1260/1999. It must therefore be assumed that it was clear to the United Kingdom, notwithstanding
         the question disputed between the parties as to the continuance in force of the conditions under Article 10 of the Annex to
         Decision C (92) 1358/8, that failure to respect the time‑limit under Article 52(5) of Regulation No 1260/1999 would result
         in decommitment.
      
      136. Finally, the conflicting views were discussed between the parties and the reasons for decommitment explained to the United
         Kingdom in the long exchange of correspondence between the parties, in particular the letters of 24 January, 18 April and
         12 June 2002.
      
      137. It follows from all of the foregoing that, in the specific circumstances of this case, the Commission provided a sufficient
         statement of reasons for its decision of 22 November 2002.
      
      138. The third plea must therefore be rejected as unfounded.
      VI –  Conclusion
      139. In the light of the foregoing considerations, I propose that the Court should: 
      –        dismiss the application of the United Kingdom of Great Britain and Northern Ireland in its entirety;
      –        order the United Kingdom of Great Britain and Northern Ireland to pay the costs of the proceedings.
      1  –	Original language: German.
      
      2 –	Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds (OJ 1999 L
         161, p. 1, ‘Regulation No 1260/1999’).
      
      3  –	OJ 1988 L 374, p. 1 (‘Regulation No 4253/88’).
      
      4  –	See Article 54 of Regulation No 1260/1999.
      
      5  –	See point 18 above.
      
      6  –	See also the judgment of 9 December 2004 in Case C‑123/03 P Commission  v Greencore Group [2004] ECR I‑0000, paragraph 44: ‘any measure which produces binding legal effects such as to affect the interests of an applicant
         by bringing about a distinct change in his legal position is an act or decision which may be the subject of an action under
         Article 230 EC for a declaration that it is void’.
      
      7  –	See Case 190/84 Parti écologiste ‘Les Verts’ v Parliament [1988] ECR 1017, paragraphs 7 and 8: ‘This action is brought against measures entering into commitments of expenditure … Such
         measures have only internal legal effects within the administration, and give rise to no rights or obligations on the part
         of third parties. They therefore do not constitute decisions adversely affecting any person.’
      
      8  –	Case 23/80 Grasselli v Commission [1980] ECR 3709 and Case C-123/03 P, cited in footnote 6, paragraph 39.
      
      9  –	See Article 24(2) of Regulation No 4253/88.
      
      10  –	With regard to the constitutional issues which may be associated with this, see Nehl, Europäisches Verwaltungsverfahren und Gemeinschaftsverfassung, Berlin 2002.
      
      11  –	Recital 44 in the preamble to Regulation No 1260/1999 states that, to that end, any delays in financial implementation
         should give rise to repayment of advances and to automatic decommitments. 
      
      12  –	Submission within the specified time of a request for payment of the balances, submission of a report as specified, transmission
         of a certificate confirming the information.
      
      13  –	Case 44/81 [1982] ECR 1855, paragraph 16. 
      
      14  –	See point 75 above.
      
      15  –	See point 76 above.
      
      16  –	It should be recalled here that, in its judgment in Case C‑84/96 Netherlands  v Commission [1999] ECR I‑6547, paragraph 57, the Court has already interpreted  the concept of ‘application for final payment’ – albeit
         in connection with another legal basis – and in that respect held that – regardless of the question as to any confirmation
         of the information concerned – ‘requests for final payment submitted by the Member States must at least contain the information
         which the Commission needs in order to proceed with the final conclusion of those projects and payment of the sums claimed’.
      
      17  –	The provision thus distinguishes between those requirements which are to be complied with by the authority and those which
         are to be complied with by the Member State.
      
      18  –	Articles 10 and 14 of Regulation No 4253/88.
      
      19  –	Article 23 of Regulation No 4253/88.
      
      20  –	See also recital 43 in the preamble to Regulation No 1260/1999: ‘… sound financial management should be assured by providing
         that expenditure is to be duly justified and certified …’.
      
      21  –	It should be recalled here that, according to the Court’s case-law (Case C‑86/89 Italy  v Commission [1990] ECR I‑3891, paragraph 20), for a decision to be valid in law, it is sufficient that its essential ground is well founded.
         Any flaws which might vitiate the other grounds of the decision have no bearing on the lawfulness of the decision. 
      
      22  –	With regard to the absence of discretion in relation to automatic decommitments, see also Case C‑84/96 Netherlands v Commission, cited above in footnote 16.
      
      23  –	See point 75 above.
      
      24  –	See only Case 116/82 Commission v Germany [1986] ECR 2519 (‘Quality wine’), paragraph 21.
      
      25  –	European Fertilizer Manufacturers Association(EFMA)  v Counciland Commission [2000] ECR I‑7079, paragraph 38.
      
      26  –	See Case 230/81 Luxembourg  v Parliament [1983] ECR 255 and the order in Case C‑2/88 Imm. Zwartveld [1990] ECR I‑3365.
      
      27  –	In this connection, see also point 109 above.
      
      28  –	Case C-350/88 Delacreand Others [1990] ECR I‑395, paragraphs 15 and 16.
      
      29  –	See, to that effect, the judgment of the Court of First Instance in Joined Cases T‑46/98 and T-151/98 CEMR  v Commission [2000] ECR II‑167, paragraph 48.
      
      30  –	In this context, reference should be made to the Court’s case‑law on the clearance of EAGGF accounts, according to which
         the involvement of a Member State in the process by which a decision is made is relevant with regard to the extent of the
         duty to state reasons. See, for example, Case 819/79 Germany v Commission [1981] ECR 21, paragraphs 19 to 21.
      
      31 –	See point 109 above.